Negotiating Debt and Credit
Part II

Steps to Improve Your Credit Worthiness

One easy step you can take to improve your credit score is to close old accounts. To close out old accounts do the following:

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  • Make sure it's ok to close the card. Don't close any credit cards with balances, your only credit card with available credit, your oldest credit card, or the credit card with the best terms. You also should not close your only credit card.

  • Call the credit card company to get the account number. Usually, your credit report contains the contact number for the company listing the account. No phone number listed on the credit report? Try using a search engine like Google or Yahoo! to find the company's website.
    Look for a "Contact Us" link on the site to find a contact number. Try looking through your old documents to locate a credit card statement from that creditor.

  • Contact Customer Service. When you have a number, call the card company. Let them know you have an account with them, but no longer have the credit card or the credit card number. The customer service representative will ask for some identifying information to look up your account.

  • Follow up the call in writing to have a record that you requested your credit card to be closed. In the letter include your name, address, and credit credit card number (or at least the last four digits of the card number). State that you made a request by phone to have your account closed on such-and-such date and you want your credit record to reflect the account was closed at your request.

Consumer reporting companies must investigate the items you question within 30 days - unless they consider your dispute frivolous. If they cannot verify the item(s) contested within 30 days, they have to drop them.

They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it is required to investigate, review the relevant information, and report the results back to the consumer reporting company.

If this investigation reveals that the disputed information is inaccurate, the information provider has to notify the nationwide consumer reporting companies so they can correct it in your file. It can take up to 60 days to clean up your credit score. During that time you don't want to apply for any credit. You want to make sure all disputes have been resolved and to verify your new FICO score before proceeding with the car buying process.

People with good credit often have too much credit and too many open old accounts that they no longer use. I was shocked when I got my report and saw all of the credit accounts till open from credit cards I no longer had. These accounts need to be closed.

Keep your records up to date. Make sure you keep copies of all letters you send. Send letters certified mail, return receipt so you have proof a letter was mailed and received should that fact ever come into question.

If you simply cannot get yourself to take these steps then consider hiring a credit repair company but be careful. Many of the so-called "reviews" of some of the biggest advertisers, are really company shills "posing" as experts.

Also beware of sites that offer reviews from satisfied "customers." Often if you look over several sites you will see the exact same "review" quoted word for word in each. Again, someone is shilling for that company and you can't trust the review. Also make sure you check out all costs before signing up.

Choose a credit repair company that has your best interests in mind. Select one that has a proven success record; one that stays abreast of all the latest credit repair techniques. Also check out the fees, many we checked online charge $800 upfront for their services.

There are additional steps you can take to increase the likelihood that you will get approval for any loan or credit card.

  • Wait to apply for any new credit until you have lived in your present address for at least six months.

  • Wait for at least 3 years if you have declared bankruptcy.

  • It helps to have a prior loan or mortgage on your credit report.

  • Settle any charge offs from creditors that appear on your credit report and have the company report the change and remove the charge off from your account.

For sample dispute or account close letter, click here.

Mail letters to correct information or close accounts to:

P.O. Box 2002
Allen, TX 75013

Equifax Information Services, LLC
P.O. Box 740256
Atlanta, GA 30374-0256

TransUnion Customer Relations
P.O. Box 34012
Fullerton, CA 92834
Fax 1 (714) 447-6032

For more information about negotiating debt, click on any of the links below.

For more information about negotiation, click on any of the links below.

To learn more about other conflict resolution topics, click on any of the links below.

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