If you have found this article through searching “Second Chance Credit Repair” then you have found one of the best resources to get you back on the right path to a total credit restoration! The reason why I say this is because I have personally and recently used the method I am going to reveal to you. This will save you time and unnecessary inquiries on your credit file that can hurt your Vantage or FICO score further.
The first step you will want to do is to get your free credit score and file by signing up to Credit Karma. This will allow you to get current information contained on two credit reports, TransUnion and Equifax, along with your Vantage credit score. This will also allow you to get a updated credit score and file about every two weeks so you can monitor your credit restoration efforts. They don’t ask for any credit card or banking information because there are no hidden fees or gimmicks.
If you want to view your Experian credit file you will need to visit annualcreditreport.com which can provide you one free report each year, however there is a additional charge to see your credit score. To learn more about this website I strongly urge you to watch the video that was created by the FTC (Federal Trade Commission) posted below the next paragraph.
Once you have reviewed all three copies of your credit file, you will want to dispute any inaccurate information. If you need further information on obtaining credit reports and/or how to dispute inaccurate information contained on them, then I will direct you to read this comprehensive article at the FTC – http://www.consumer.ftc.gov/articles/0151-disputing-errors-credit-reports which will explain the step by step process to obtaining and disputing inaccurate information on credit files.
This next step I am going to explain is important and can save you money on old unpaid debts. If you have located any negative bad credit items on your credit report that is correct and remain unpaid then you will need to take a look at the last date that they were paid on or the date it was reported as unpaid to the credit bureau. You need to know this because bad credit negative information more than seven years old from the date of last activity (ten years for bankruptcies) must be removed from your file. It is really important to know that paying on a credit account that hasn’t been paid in years and is due to fall off your credit file will reset that 7 year clock! If your still worried about a debt collector suing you in court for a old unpaid debt, then I recommend your read this article written by the FTC at http://www.consumer.ftc.gov/articles/0117-time-barred-debts which will explain “When is an old debt too old for a collector to sue?” and “What should I do if a debt collector calls about a time-barred debt?”
Any unpaid debts that are not due to fall off your credit file in the near future will need to be paid off. However, this does not mean you can’t negotiate with the debt collector to get the amount owed reduced. The older the debt, the more likelihood the collector or creditor will take a reduced settlement. The best way to get the total amount reduced is to offer a lump sum payment. Some debt collectors will want seventy-five to eighty percent of what you owe while others will take fifty percent. Those that have given up collection activities on you may settle for 1/3 or less. Before offering them any amount of money decide the top amount you are willing to pay and stick to it because once the debt collector knows you are willing to pay something, they will try to talk you into paying a higher amount. Never agree to pay them anymore than you can afford and never give them your place of employment or banking information or they may harass you to no end if a settlement is not reached. Pay the settlement with a credit card (not a bank card) or pay with a prepaid card.
Once your unpaid debts have been settled and reported to the credit bureaus you will need to get approved for at least one credit card (2-3 would be more ideal for faster credit repair) so that you can start to build a positive credit history with on-time monthly payments. If you still have credit cards that are valid, then all you need to do is to make your monthly payments on-time and reduce your credit card balances (this will be explained further down).
Getting a credit card with bad credit that can give you a second chance at credit repair may seem like a impossible task to some. Take it from me though, I know exactly what credit card companies are willing to take a second chance with you. This is because I took my own bad credit and applied for every credit card, car loan and personal loan known to man. My daunting task will save you from any unnecessary credit inquiries that can and will hurt your credit rating further.
The easiest unsecured credit card to get approved for with no upfront fee is by Credit One Bank. They have a quick pre-qualifying application on their website at prequal.creditonebank.com. If you get denied, don’t get discouraged and keep reading.
If denied by the above bank, visit Fingerhut on-line to learn about their Fingerhut Fresh Start Credit Card For Bad Credit. Then fill out their quick application and if your approved you can then shop for merchandise at their on-line store. Once you find the item you want, you will need to make a down payment of $30 to get your item shipped and then 6-8 more monthly payments to pay the balance off. These payments will be reported to the major credit bureaus and once your item is paid-off, you will then be able to get easier approval for their revolving credit account with higher credit limits.
Another easy credit card to get approved for is a Valero gas card at valero.com. All I can really say about them is that my credit was shot and I was approved for $300.
The above credit cards / merchandise cards are the only ones that would approve me with no upfront fees. The following two approved me with various one-time, non-refundable fees.
Total Visa – was approved for a $300 credit line with a $89.00 Processing Fee that I had to pay upfront.
First Premier Bank – was approved for a $300 credit line with a $95.00 Processing Fee that I had to pay upfront.
**Both the above credit cards report to the credit bureaus.
If your still looking for more accounts to get approved for with bad credit, then the only one left I can suggest is a car loan by Santander Consumer USA. This is the only finance company that would approve me for a car loan. However, even though I was still approved, they were going to charge me a interest rate of 25%.
Once your done opening your new accounts, the only thing left to do is to make on-time monthly payments. So don’t slip up on those or your credit score will suffer that much longer! Also, keep all your credit card balances below 30% of your credit limits as this can have a major impact on your credit score until those balances get reduced and reported to your credit reports.