If you’ve incurred huge amounts of credit card debts, you can either consolidate them through credit card consolidation to improve your credit score, or you can also contact a credit repair company that will help you repair your credit score by following certain points. The question that bothers most people with poor credit score is whether or not it is fair enough to repair your credit on your own. Here are some steps that will guide you throughout the credit repair process and ensure an improved score.

1. Order a credit report: You’re entitled to get a free copy of your credit report from any of the three credit reporting agencies. Avail this opportunity and make sure that you order a free credit report in order to understand where you stand financially. While you may already have an idea of the negative impacts on your credit report, you may also get to know some updates about your score. Check your score to analyze any kind of errors and dispute of you find them. This is the first step that you can take while seeking credit repair help.

2. Tackle your past due accounts: You must be aware of the fact that your payment history comprises of an important part of your score. How many past payments are due is an important factor that influences your score. It is your financial responsibility to tackle all you past due accounts so that they do not have a negative impact on your credit score. Gather funds from anywhere possible and concentrate towards paying off your past due accounts and clear them off. Falling behind on such payments tarnishes your credit score.

3. Get a new credit card: You might be surprised to read this point, but you might be unaware that getting a new credit card can often improve your credit score. As your creditors already know that you cannot handle your finances properly through your credits core, it’s high time that you prove them wrong by getting a new credit card and trying your best to remain current on it. If only you’re sure about your repayment abilities, get yourself a card, because re-defaulting on your new credit card can be dangerous for your financial life.

Therefore, if you’re up to your eyeballs in credit card debt, first go for credit card consolidation to improve your credits core. Also make sure that you opt for do-it-yourself credit repair in order to nullify all the errors in your credit report and make it immaculate. You can boost your options for obtaining new lines of credit by repairing your credit score.

Company Name__________________________ Account #__________________________
__ Not my account          __ Was never late           __Account paid in full
__ Current status incorrect          __ Other              __Dispute
Explanation________________________________________________________________

Company Name__________________________ Account #__________________________
__ Not my account          __ Was never late           __Account paid in full
__ Current status incorrect          __ Other              __Dispute
Explanation________________________________________________________________

Company Name__________________________ Account #__________________________
__ Not my account          __ Was never late           __Account paid in full
__ Current status incorrect          __ Other              __Dispute
Explanation________________________________________________________________

Courthouse or Collection Agency accounts
Courthouse or Collections agency_______________________________________________
Case number for courthouse records only_________________________________________
__ Not Mine (explain)          __ Satisfied           __ Released           __ Dismissed
__ Discharged          __ Collection was paid           __ Other (explain)
Explanation________________________________________________________________

Courthouse or Collections agency_______________________________________________
Case number for courthouse records only_________________________________________
__ Not Mine (explain)          __ Satisfied           __ Released           __ Dismissed
__ Discharged          __ Collection was paid           __ Other (explain)
Explanation________________________________________________________________

I certify that all information above is true and factual.
Signature ____________________________________________ date __________________

In my opinion, trying to achieve a perfect credit score is a waste of time. The truth is that unless you are simply obsessed with that, a perfect credit score is not needed. Just maintain them over 760. Pay your bills on time, neither apply nor open new credit card accounts but stick to the ones you have for years and pay credit card balances in full monthly. If you do carry a balance or a few, keep them under 10 percent of your combined credit limits. Then over the time, you will get a near perfect credit score and rating.

Q: I have a question on TransUnion codes. Got my credit report and can’t quite figure out what 09P means? Also I have R03 codes in two places. My TransUnion credit score is only 574.

A: TransUnion code 09P most probably stands for bad credit charge off. Is that on the far right under under MOP column and under Collections section? 09 code is for a charge off and ‘P’ is likely just a date indicator.

TransUnion R03 codes indicate your revolving accounts which are more than 60 but less than 90 days past the due payment dates. Basically it sounds like you have two bad credit card accounts which are over 60 days late. No wonder your credit score is low.

Here are the TransUnion codes for account type and how you pay those accounts.

Type of Account
O - Open Account (30, 60 or 90 days)
R - Revolving or Option
I - Installment
M - Mortgage
C - Check credit (line of credit)

Current Manner of Payment
00 - Not rated, too new to rate, or approved but not used
01 - Pays as agreed
02 - 30–59 days past the due date
03 - 60–89 days past the due date
04 - 90–119 days past the due date
05 - 120 days or more past the due date
07 - Paying or paid under Wage Earner Plan or similar arrangement
08 - Repossession
8A - Voluntary repossession
8D - Legal repossession
8P - Paying or paid account with MOP 08
8R - Repossession; redeemed
09 - Charged off to bad debt
9B - Collection account
9P - Paying or paid account with MOP 09 or 9B
UC - Unclassified
UR - Unrated

See more credit report codes that you can encounter.

I bet many of you are going to get a kick out of it. The Fair Debt Collection Practices Act or FDCPA was created in 1978 as a part of the Consumer Credit Protection Act, specifying strict guidelines under which debt collectors may conduct business, defining consumer rights and providing consumers with an avenue for disputing and obtaining debt validation information in order to ensure its accuracy. The FDCPA also prescribes penalties and remedies for violations of the Act. Basically it gives you some ammunition against collection agencies, prohibiting them from using abusive and deceptive collection practises among other things.

Well, today TransUnion announced that it will start utilizing data from FDCPA Case Listing Service LLC to provide an added feature for batch records delivered via TransUnion Collections Prioritization Engine. The new solution, named FDCPA Case Search, allows TransUnion to alert debt collectors about collection accounts that have previously been involved in FDCPA litigation to assist collectors in determining strategy. So basically, the idea is to help collection efforts against you, the consumer. Supposedly, in 2008, 5,383 cases were filed against collection agencies in U.S. District Court for alleged violations of the FDCPA. The expected figure for 2009 is well in excess of 7,000 for the whole year.

My heart goes out to those poor collection agencies, but I have always thought that the purpose of credit agencies, TransUnion included, is to simply gather, arrange, process and report. But then again, in a slow economy, everyone wants to make a buck. See Free TransUnion credit report, FICO score and dispute.

Q: A judgment was filed last February and I just paid it in full yesterday. Does a paid judgment affect credit scores? Can I remove a paid judgement from my credit report? I would like to buy a house in a few months.

A: Of course, paid judgment stays on your credit report for at least 7 years and affects your credit scores very negatively. You may still try buying your house if your middle score is at least 620. You can even get an FHA loan, but unless you had quite an establish credit history prior this judgment, I doubt you scores are above 620 now. But check them as soon as you can. Get the same mortgage broker whom you may later use for home purchase to run your credit report. Can you remove a paid judgement from credit reports? Theoretically, you can try get this judgment vacated. You would have to file Motion to Vacate Judgement. Procedures also vary depending on state. See here.

- FICO that used to include all three scores from Equifax, TransUnion and Experian

- the fact that Experian severed its 6 year deal with FICO

- the emergence of VantageScore

- FICO score scale for consumers differs albeit slightly, from one for lenders

- long rumored MedFICO credit score for health care industry

- credit scale used to calculate insurance premiums

- credit score scale and credit rating scale

While virtually no one, including myself, knows for sure what proprietary credit score and scale are used to figure out someones costs of insurance or what exactly MedFICO is going to use, the main interest of the readers is credit score scale used by lenders to qualify them for home mortgages and car loans. Things get even more complicated when it comes to credit repair.

As I specifically pointed in repair credit score for the right type of loan, things that help to increase credit scores for a mortgage may just backfire if you apply for a car loan. But let’s go back to our credit score scale range and guide.

The former classic FICO scale ran slightly differently among three credit reporting agencies, and between the range of scores given to consumers (on the left) vs. with that when pulled by the lenders:

Now with Experian no longer being a part of the FICO, you have to get a separate Experian credit report and score, that is if you want to see the entire picture. The other thing that changed with ongoing housing and credit turmoils, what scale is used by lenders to determine your credit rating. Right now we can state quite confidently, that to qualify for a home loan, your average credit score must be at or above 620. I would offer you the following FICO scale to rate your credit:

Just for laughs, take a look at what credit rating scale and range were used by sub prime lenders. I wrote that guide in February of 2006, when home loans were fast and easy, and disaster was getting quite imminent. But going back to the topic, VantageScore uses scale between 501 and 990, with higher scores representing obviously a lower likelihood of risk.

I am still not sure to what extent VantageScore is used by creditors at this point. But in any case, Vantage credit rating scale uses 5 letters and to obtain a loan, you should be rated no less than ‘C’, in my opinion:

Now that you are completely confused with credit score scale, here are several useful links you may want to read at your leisure,

VantageScore vs. FICO Score confusion explained

VantageScore Credit Score vs. FICO Score

Credit scores and what they mean

You can get a free Experian credit report but not the score from Free Annual Credit Reports as everyone is entitled for one copy per year. Your credit scores can be purchased separately. But the quickest way is to get your credit report and score directly from Experian. You can do it for free and this is how you do that.

Experian, like the other two credit agencies does nothing for free. But you can order a trial membership in Triple Advantage Credit Monitoring provided by Experian, get your credit report and score, then cancel your membership within 9 days of enrollment. Otherwise, you will be billed $14.95 for each month that you keep this membership. It may not be such a bad idea to keep it, since it does protect you from identity theft and other unpleasantries. While enrolling, be ready to provide Experian with your credit card, which isn’t going to be charged during trial period, but has to be on file to establish your account.

To initiate a dispute, start with a current copy of your Experian credit report. If you don’t have one, order online for immediate access. If your credit report is more than 90 days old, order a new one. Experian much preferred way of disputing is online, which is quite convenient and works the fastest. While reviewing your credit report online, you can easily access the dispute process. You must have your Experian credit report number to request a dispute. Here are few important points -

- carefully view your report and click on a particular item for more details – if you find an error, just click on the blue Dispute This

- read the Tell Me More About Dispute Reasons section for tips on how to dispute credit information and don’t forget to provide your email address to receive notification when the dispute results are ready

- select a specific reason why the information is wrong and enter any additional explanation, then click on the Submit

Right away, Experian sends a notice to the source of the information, and within 30 days, the source must verify the data it supplies Experian with. Information verified as correct cannot be removed from your Experian credit report.

Note that none of the following programs – Credit Manager, Triple Advantage, 3 Bureau Online Credit Report and Score, and PLUS Score and Experian Credit Report, comes with Experian credit report number, but you can dispute online, using user-name and password set up for you account, when you enroll in any of these programs. You can also check your dispute status online. Experian also allows you to place Security Freeze and/or Security Alert on your credit report.

Q: I need to fight an item in dispute with Equifax as soon as possible. There is an incorrect negative information on my credit report and few inaccuracies I need to change.  Out of all three bureaus, only Equifax is reporting this incorrect information.

A: Incorrect items on your Equifax report can be disputed by phone, by mail or online.  A dispute takes no more than 30 days (by law), but occasionally can last up to 45 days (until you have your results).  To dispute, however, there is a catch. To talk to a live representative, you must have a Report Confirmation Number, which can only be found at the top of your Equifax credit report or file.

Equifax also wants a Report Confirmation Number for an online dispute.  You can also start your dispute by mail without this number – however this will add to your turnaround time.  Be sure to keep Equifax Report Confirmation Number for future references.

Keep in mind that you will need to provide personal information and supporting documentation for a dispute, such as

- name, address, social security number

- if you dispute name or date of birth, Equifax must have a copy of your driver license reflecting this change

- if you dispute current address, send a copy of your driver license or a utility bill reflecting this change

- if you dispute social security number, send a copy of your social security card or a W-2 form

- if you dispute specific credit records, provide all relevant information to support your dispute with Equifax

If you are in hurry, get your free Equifax credit report quickly and see what is in there.  Be sure to keep in mind that free annual credit reports don’t come with credit scores.  However, those can be purchased later .