Easy Credit Repair Tips

A good credit rating requires you to have and use revolving accounts, take out installment loans and pay all of those obligations on time, according to MSN Money website writer Liz Pulliam Weston. Your credit file looks bad when you run up too many debts, or miss payments, but there are several easy ways to repair your standing.

Catch Up Past-Due Accounts

Your credit records are hurt every month that you're delinquent on any accounts. The My FICO credit score education website explains that late payments affect 35 percent of your overall score. Credit cards and loans show up on your credit reports, so make them your priority, but pay up utility bills and other obligations as quickly as you can, too. Creditors who don't report to the TransUnion, Experian and Equifax bureaus may turn you over to a collection bureau, or sue you, if you neglect your accounts for too long. Collections and judgments appear on your reports and are figured into your score.

Dispute Harmful Mistakes

Your credit reports are likely to contain some mistakes. Bob Sullivan, a columnist for the MSNBC website Red Tape Chronicles, warns that up to one-quarter of consumer credit reports are inaccurate in ways that hurt credit. Your report is available for free every year from TransUnion, Experian and Equifax through annualcreditreport.com, according to the Federal Trade Commission. Review your records, fill out dispute forms on the credit bureau websites concerning any errors you find, and check out the results after the bureaus process your disputes, which must be done in 30 days under the federal Fair Credit Reporting Act (FCRA). Some, or all, of the negative items should be gone. The FCRA makes the bureaus eliminate entries that aren't verified by the original information providers within the 30 day window.

Eliminate Outdated Information

Most past credit mistakes don't haunt you forever. The FTC website advises that past-due bills, court judgments, repossessions, charge-offs, collection accounts, foreclosures and similar items can stay in your reports for up to seven years, while bankruptcies appear for a decade. You can dispute old items that should've been automatically erased, if you find them on your credit reports. Use the credit bureaus' electronic dispute forms, and complain that the information is legally due for removal.

Negotiate Credit Report Entries

You can often repair your credit by negotiating payment of old bills with the account holders. Lenders generally charge off unpaid balances for tax purposes if you refuse to pay for six months, but this doesn't erase your obligation to pay. A charge-off entry stays on your reports for seven years if you never take care of the bill. Steve Bucci, the Debt Adviser columnist on the Bankrate financial website, explains that you can negotiate a change or removal in the entry if you make a settlement. Insist that the lender mark the account "paid as agreed", or remove it completely, in exchange for a lump-sum payment. Get the terms in writing before sending any money.

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How to Remove a Charge-Off from Credit

A charged-off account is when a creditor reports your past due account to the Internal Revenue Service as a loss. This happens when there has been no payment on an account for 180 days. The charge-off status is also reported to the credit reporting agencies, which include Transunion, Equifax and Experian. Account information could be reported to all three credit reporting agencies or only one or two. A credit report will be negatively impacted by a charged-off account. Charged-off accounts remain on your credit file for seven years.

Instructions

1

Review a copy of your credit report. See if the seven year time frame has passed. Once seven years has passed, the information should drop from your credit file automatically. If the information remains on your file longer than seven years, you will need to contact the credit reporting agency that reflects that information.

2

Send a letter to the credit reporting agency. Your letter should be sent certified mail and with a return receipt requested. This will serve as proof that you actually sent the letter. Credit reporting agencies have 30 days to investigate and handle your request. When they check the time frame for reporting, they should remove the item right away. The credit reporting agency will send you an updated credit report once the change has been made.

3

Negotiate with the collection agency. Creditors will send charged-off balances to collection agencies for further collection activity. You can negotiate with the collection agency regarding the payment of your balance. As a condition of paying your balance in full, ask the collection agency to remove the charged-off account information from your credit file. If the agency agrees to do this, make sure you receive the arrangements in writing. Many agencies will do this even though the seven-year time frame has not passed.

4

Contact the original creditor. There are cases where your account will be reported to a credit reporting agency twice, once by the original creditor and once by the collection agency. During the negotiating process, you will have to also contact the original creditor, in addition to the collection agency, so that each company can remove the bad credit entry appearing on your credit file. If the original creditor has no record of the account, dispute the information with the credit reporting agency.

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What Are the Three Consumer Credit Bureaus?

Credit bureaus, also known as credit reporting agencies, maintain files on borrowers that track their payment histories and ability to meet credit obligations. The three major credit bureaus in the U.S. are TransUnion, Experian and Equifax. Content in the files sets the score that determines your eligibility for credit and available interest rate. You are entitled to one free credit report from each bureau annually.

TransUnion

TransUnion started business as a rail-car leasing business, Union Tank Car Company, more than 30 years ago and expanded into collecting consumer credit information. The company has 50,000 clients in 25 countries on five continents and serves more than 500 million consumers. TransUnion specializes in risk management by collecting consumer data from various sources, including banks, insurance companies, merchants, collection agencies, hospitals and utilities, according to The Encyclopedia of Business. TransUnion also manages portfolios for clients, collects debts, analyzes data trends and offers personal credit monitoring to consumers through the subsidiary, TrueCredit.com. The company claims to take privacy seriously and strives to maintain a balance between safeguarding consumers' credit data while meeting the needs of their clients, who rely on customer information to make business decisions.

Experian

Experian utilizes the power of consumer data to ensure clients target the correct demographic, properly manage existing consumer relationships and recognize opportunities for growth. The company also assists clients with marketing and debt collections. The company says it helps lower customers' costs by helping screen out undesirable clients, reducing exposure to fraud and automating daily business operations, such as granting credit to applicants. According to Experian, the agency mails out more than 20 billion promotional fliers to more than 100 million households yearly on behalf of clients. The company's headquarters is in Dublin, Ireland, but Experian has offices in 40 countries around the world, including the United Kingdom, Brazil and the United States, and employs more than 15,000 people. Experian maintains information on more than 400 million consumers culled from myriad industries, including telecommunications, mail-order businesses, utilities, mortgages and auto loans. Private consumers can order their credit reports from Experian, along with reports from the other two bureaus, or subscribe to the company's credit monitoring service, Triple Advantage.

Equifax

Equifax has been in business for more than 100 years. Using proprietary development practices, Equifax assists businesses with customized reports and empowers consumers to manage their individual credit profiles, avoid identity theft and maximize current and future financial opportunities. The company employs around 7,000 people and operates from 16 countries, including those in Latin America, North America and Europe. Atlanta, Georgia, is the headquarters for Equifax. Equifax provides credit data, assists companies with identifying target customers, determining risk levels, expanding consumer bases and collecting outstanding debts. The company serves clients in several industries, including financial services, retailers, utilities and mortgage lenders. Equifax sells credit reports to individual consumers and offers a subscription service, CreditWatch, to monitor your credit file on a continuing basis.

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What Can You Do to Have Something Removed Off Your Credit if That Was the Divorce Ruling?

One of the biggest problems couples have with a divorce is that they cannot separate some debts no matter what happens. Even a judge's decree usually cannot force a creditor to remove something from a spouse's credit. Persistent debts after a marital dissolution often happen because married couples frequently agree to take on each other's debts during the marriage.

Joint Accounts

If you owe money on a jointly held credit card or co-signed a mortgage, you both must repay the debt regardless of what a divorce ruling says, because you pledged to repay the debt when you took it out. Divorce decrees apply to you and your spouse, not to your creditors. Only for accounts opened before June 1, 1977, do creditors not have to report histories for both spouses on a joint account, according to the Federal Trade Commission. Creditors can remove your name from debts, but this rarely happens, because having more people on an account increases the chance of repayment on the debt.

Errors

Individual accounts keep you and your ex-spouse's debt obligations separate. Unless you live in a community property state, such as Texas and California, which gives debt obligations incurred during marriage to both spouses, individual accounts should not appear on both credit histories. If a spouse's accounts appear on your credit history erroneously, you should dispute them with the credit reporting bureaus. They will investigate your claim within 30 days. You should mail the bureaus proof of separate liability. A copy of the marital dissolution, for instance, may help your case.

Considerations

One of the best ways to save your credit during and after a divorce is to work with the spouse to separate your liabilities. For instance, in general, only refinancing a loan removes your name from it. In the case of joint credit card accounts, you could divide up the bills yourselves, pay them and close the account. Some creditors will transfer debts to individual accounts from a joint account, but you may still have to pay the entire balance if the other spouse defaults on his share of the bills. Ideally, you should do this before the marriage officially ends.

Tip

Instead of trying to prove to creditors that you do not owe a debt with a divorce decree, pay the bills and try to collect from the spouse later. If a spouse does not pay his portion of the bills, you can go back to the judge and ask him to find the your ex in violation of the divorce decree. Monitor your credit report as often as possible for erroneous accounts and new debts.

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When Will a Student Loan Delinquency Come Off the Credit Report?

If you miss a payment on a student loan or you are over 30 days late on the loan, the account is marked as a negative account and lowers your credit score. Negative accounts are limited in the amount of time that the lender can report the information, so the negative does eventually drop off of your credit report in seven years.

Credit Scoring

The information on your credit report is used to create a credit score. Many different factors go into the credit score calculation, such as your payment history, delinquencies, types of credit accounts and credit balances. The main area that a delinquent student loan affects is the payment history.

Credit Reporting

The issuer of your student loan reports the account to the credit reporting bureaus, TransUnion, Experian and Equifax. The reported information includes your minimum payment, your balance, your highest total balance, two years of payment history and the account status. According to Experian, accounts with negative notations, such as a delinquent student loan, report for seven years before falling off of your credit report.

Repairing

A delinquent mark on your credit report affects you more when it is recent. Over time, the impact of the late payments gets less and less. However, the negative impact is not entirely removed until the delinquent student loan falls off of your credit report entirely.

Re-establishing

As the delinquency ages, your credit score will naturally go up, but you do have other methods to help your credit score along. According to MyFICO, re-establishing positive credit lines following a delinquency will improve your score as well. You do not need to add another student loan account as a positive trade line; any type of credit account in good standing will work.

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Can My Credit Affect My Husband?

Even though marriage has no direct effect on your credit score and you can keep your accounts separate, your credit likely affects your husband. This phenomenon occurs because couples join their financial accounts under the assumption that they will stay together forever. This could help -- or damage -- both credit histories.

Identification

The most common reason a spouse affects another spouse's credit score is that they apply for joint accounts -- there is no such thing as a joint credit report. Payment history on a joint account appears on both you and your husband's credit history. This could boost your husband's credit score if you pay your monthly bill on time, or damage his credit if you miss payments.

Considerations

When your husband applies for a loan and claims an income that includes your income, the lender probably will perform a check on your credit history too. The lender also probably includes your debt obligations in a monthly debt-to-monthly income ratio. A high DTI ratio -- usually more than 35 to 50 percent including the potential loan -- could preclude your husband from acquiring a loan regardless of his credit rating. If you have a poor credit rating, the lender may focus more on your rating than your husband's.

Community Property

Using credit during marriage, even on individual accounts, can still affect your husbands credit rating. In community-property states, which includes some large states like Arizona and California, you share debts with your husband when you took them during marriage. If you default on a loan in, say California, the lender could sue your husband. The civil judgment would appear on his record and damage his credit rating.

Tip

If you have poor credit, you may want to have your husband apply for loans for your family on his own until you improve your credit rating. You can help each other raise your scores while reducing his liability for your debts. For example, your husband can add you as an authorized user on his credit card accounts. This would build your credit rating, but your husband can remove you as an authorized user at any time and you do not have a bill in your name.

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Can a Credit Report Be Used As Evidence in a Credit Card Lawsuit?

Statutes of limitations are for the protection of consumers. State governments bar creditors from suing a debtor after a set period of time, known as the statute of limitations. Every state mandates its own statute of limitations on the various types of debt. Expired debt is not collectible in a state court. A credit report may help substantiate a time frame.

Identification

A consumer credit report can be used in a credit card lawsuit. However, the consumer credit report must be valid and in its original form. For example, the consumer credit report cannot contain omissions, revisions or blacked-out information. The document must be whole and in legible condition. If the document has been tampered with, a judge may dismiss the consumer credit report as evidence and charge the party using the compromised document with contempt of court.

Considerations

One way to protect the integrity of a consumer credit report is to purchase a new report in advance of your court trial or hearing. Have an original copy mailed directly to your attorney, the judge overseeing the case or you, in which case, you should wait to open the report until your trial or hearing convenes. Provide a state court with the most recent version of a consumer credit report unless an older version provides the information you require for your case. Take into consideration the estimated arrival time when ordering a new report for an upcoming court date. Bring copies of old billing statements, bank statements and payment receipts or canceled check to substantiate the information documented in your consumer credit report to prove your defense.

Relevance

The most common reason a consumer credit report would be used in a credit card lawsuit is to establish the time line for a debt. For example, a plaintiff may use a consumer credit report to prove the existence of a debt as well as to document a debtor's payment history. Such information is important when determining whether the statute of limitations on a debt has run out. If the statute of limitations has not run out, the debt is still collectible in a state court.

Statutes of Limitations

Statutes of limitations cover four types of debt: written contracts, oral contracts, promissory notes and credit card accounts. Each type of debt has its own statute of limitations. For example, states such as New York, South Dakota and Vermont all have a six-year statute of limitations on credit card debt. Wyoming, West Virgina and South Carolina have a 10-year statute of limitations on written contracts.

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Why Checking a Person's Credit History Is Illegal

Your credit history is one area of your life where a total stranger can view nearly everything you do. Federal regulations govern consumer credit checks, so running a credit report can violate the law. Most credit checks are legal, because the party running the check usually gets a person's consent as well the information to run a check from the consumer.

When a Credit Check is Legal

Someone can check your credit if you consent to releasing your report. After receiving your consent, an ndividual or entity checking your credit must only do so in connection to underwriting insurance, employment, professional licensing, issuing credit or some other business need. Credit checks due to business need must have relevancy. For instance, a credit check would be prudent for a bank teller, but probably not for a ditch digger.

Illegal Credit Checks

Creditors and other parties with a legitimate business need usually request your signature to prove consent. Just giving someone information needed to run a credit check -- a driver's license contains most of information needed to run a credit check -- does not usually count as consent. As of June 2011, the Federal Trade Commission levies a fine of $2,500 per unauthorized credit check. In extreme cases of disregard for the Fair Credit Reporting Act, someone can go to jail for an illegal credit check.

Preventing Illegal Checks

Always ask a creditor if he plans to run a credit check. Some creditors can run a credit check with a consent, known as a soft credit check. Soft credit checks do not hurt a credit score -- a request for credit hurts a credit score up to a few points. Only the consumer can see soft credit checks when he runs a report on himself.

Removing an Illegal Credit Check

Any credit check should appear on a credit report with Equifax, Experian and TransUnion. The FTC requires these companies to furnish one free credit report each year via Annual Credit Report. Consumers should dispute a suspected unauthorized credit check with the bureaus themselves, but disputing the check with the creditor may be a faster way to remove it. Any credit inquiry leaves a credit report after two years and stops affecting a credit score one year after it appears on a report.

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Criteria for Establishing Credit History

You need a credit history to qualify for good jobs, credit cards, loans, apartment rentals, cell phone contracts, utility hookups and many other life essentials. You must use credit to build up that history, which is tricky because it means getting lenders to take a chance on you without a proven track record. Companies, employers and credit scorers focus most strongly on certain criteria, so you should do the same to build your history efficiently.

Credit Score Factors

Major credit scorer Fair Isaac Corp. explains on its MyFICO website that your score comes from very specific criteria. Payment dates are 35 percent of the score, while debt loan is 30 percent. The time you have used credit is 15 percent, while new accounts and variety of account types each make up 10 percent of your score. Pay the most attention to the first two factors when establishing your credit history, since they account for a total of 65 percent of your total score.

Other Factors

The Federal Reserve Bank of San Francisco advises that lenders scrutinize your personal finances when you are trying to get accounts to establish your credit history. They look favorably on a lengthy job history and good income when compared to your rent, utilities and other obligations. They also see bank accounts and large assets like a home or property as positive factors.

Initial Accounts

You have several options for opening your initial accounts to start your history. The Federal Reserve Bank of San Francisco explains that department stores, retail chains and gasoline companies give credit more easily than major banks that issue Visa, MasterCard, American Express and Discover accounts. Their criteria might simply include an established residence, steady income and bank account. Secured credit cards are also good for building up a history because their main criteria is the ability to put up a security deposit of as little as $300. The credit limit matches your deposit and guarantees repayment.

Credit Types

Your credit history needs a mix of different account types to look its best. MyFICO explains that lenders look for a balance between installment loans with fixed payments and revolving accounts with credit lines and variable payments. Meet this criteria by taking out a small personal loan with a short repayment term if you only have credit cards. You may also meet the criteria for a car loan, even if your credit history is limited, because the vehicle is collateral so the lender takes less risk.

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Clean up Bad Credit for Free

Desiring an impeccable credit history and a high credit score is only natural. People with the best scores receive the best rates on home loans and automobile loans. And having a good credit score can improve your odds of getting certain types of jobs. There are plenty ways to clean up bad credit. And yes, you can contact a credit repair company for help. But why spend money when you can repair your credit for free?

Get Your Credit Report

Before you can take steps to clean up your bad credit, you need to obtain a copy of your personal report and see the damage. Credit reports detail your credit history. If you have a past bankruptcy, foreclosure, repossession, collection accounts or judgments, creditors report this information to the bureaus, and it's visible to anyone who checks your credit.

Once you have your credit report and score in-hand, you can begin cleaning up your history. Paying off collection accounts and judgments can add points to your credit score. And if your report reveals inaccurate information or unknown accounts, disputing these errors and getting these remarks removed can also improve your score.

Improve Your Credit Habits

Maintaining a satisfactory credit score can be as easy as paying your creditors on time. Timely payments play a major role in credit scoring. Late payments damage your rating, and it's not always easy to recoup those lost points. What's more, other lenders may note your bad payment history and deny your request for credit.

Resolve to improve your credit habits and use credit responsibly. This often calls for self-control and organization. Write your due dates down on a note pad or calender, or sign up for automatic bill pay through your bank to prevent future late payments. And if you don't have money for an item, instead of whimsically pulling out your credit card, wait until you have the available cash.

Pay Down Debts

A high debt-to-income ratio is equally damaging. And owing several thousands of dollars on a credit card can result in paying hundreds of dollars each month in payments. This can impact your ability to qualify for a mortgage, vehicle loan or other type of financing. But you can rectify the matter by developing a debt elimination plan.

Depending on your amount of debt, it can take several months or years to pay down the balance. Cut out extra spending and unnecessary purchases and use this money to reduce your credit card balances. Get a low-interest home equity loan, or transfer your high-interest balances to a low-interest credit card. This maneuver can result in lower minimum payments, and by paying double or triple the minimum, you can get out of debt faster.

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Does It Affect Credit Score if You Settle for Less Than You Owe?

When you are late on payments for a debt, the lender is sometimes willing to accept a settlement. This is when you pay a lump sum that is less than what you owe, but the lender stops pursuing you for further repayment. This might seem like a good deal, but has negative effects on your credit score that hurt you in the long run.

Credit Reporting

Information that appears on your credit report has the potential to affect your credit score. One thing that lenders report is when you settle an account for less than you owe. The exact wording varies depending on the lender and the credit bureau, but the account is usually listed as "settled" or "partial payment accepted." Regardless of the terminology, when an account appears on your credit report as having been paid for less than the amount due, this is bad news for your credit score.

Impact in Points

Your credit score will probably decrease by somewhere between 45 and 125 points after a debt settlement appears on your credit report. The missed payments leading up to the settlement will also damage your score. The exact impact depends on what your score was before the settlement. The higher your score was before, the more points you will lose. If you already had quite a bit of negative information on your report, one more item will not make as big of a difference.

Time Frame

Negative information on your credit report affects your score for up to seven years following the event. However, over time, the negative effect diminishes. If you manage credit well after your settlement, you should be able to bounce back within a year or two. Some ways to improve your credit score are to have credit cards with a high percentage of available credit, to make payments on time and to avoid applying for credit more than once or twice a year if possible.

Tax Implications

Debt settlement does not only affect your credit score, but it can also affect next year's tax return. The federal government considers your forgiven debt to be taxable income. For example, if you owed $8,500 on a credit card and reached an agreement to settle for $5,500, the lender forgave $3,000 of debt. When you file next year, you have to include this $3,000 in your income and, unless your deductions outweigh it, you will have to pay income tax on this money.

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How to Increase a Credit Score Quickly

Your credit score is a number between 300 and 850 that quantifies the person's creditworthiness and indicates how good your credit history is. In the US, three credit reporting bureaus, Experian, Equifax and TransUnion, collect personal and business credit-related activities, as well as prepare credit reports and calculate credit scores. Your credit score is heavily affected by two factors: your payment history and your amount of debt, especially on revolving credit card accounts.

Instructions

1

Pay your credit card bills and loan installments on time. It is pivotal for a fast increase of your credit score.

2

For each revolving credit card account, calculate the credit line utilization as the ratio between an outstanding balance and the credit limit. For instance, if the credit limit is $6,000 and the balance is $3,500, then the credit line utilization is 100 x 3,500/$6,000 = 58.3 percent.

3

Repay your debt, trying to bring down the credit line utilization to 30 percent or below for each credit card. For example, you have $2,000 to repay the debt on two credit cards with account balances of $1,500 and $3,500, and the respective credit lines of $6,000 and $4,500. According to Step 2, the balance-to-credit line ratio is 25 and 77.8 percent, respectively, for those credit cards. Thus, it is better to make a $2,000 payment toward the second credit card.

4

Keep your monthly balance on a credit card well below the available credit line (aiming for 30 percent or less of the credit line utilization), even if you always pay off your outstanding balance in full. An ability to pay credit card bills in full gives the false sense of security about your credit history. For example, imagine you spent $1,200 out of $1,500 of the maximum available credit during a billing cycle, and then paid the balance completely. It's assumable that such a scenario is positive, but what is reported to the credit bureaus is the monthly balance of $1,200 with the credit limit of $1,500, that translates into 80 percent of the credit line utilization.

5

Avoid debt consolidation on one credit card account. The consolidation likely will significantly increase the balance-to-credit limit ratio and negatively influence the credit score.

6

Avoid closing credit card accounts with a zero balance. The total credit utilization, defined as the ratio of your total amount in debt and the credit line for all accounts, is another factor that determines your credit score. Accounts with a zero balance decrease that ratio and increase the credit score.

7

Stay away from opening new credit card accounts, as it inevitably decreases the credit score.

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How Quick Can You Change a Credit Score?

Credit scores are fragile things. It can take many months, even years, to improve your credit score significantly. You have to demonstrate that you can be financially responsible over long periods. However, if you're not careful, you can destroy your credit score in as little as 30 days.

Credit Scores

A credit score is a reflection of your credit history from the past seven years. It tells potential lenders how creditworthy you are. The actual formula used to calculate credit scores is a secret. However, we do know what sort of information goes into your score. The two most important things are your total debt and your repayment history. Also considered it the length of your credit history, the types of credit you have, and your number of recent credit applications.

Credit Reporting

Credit card companies report to one or more credit bureaus every 30 to 60 days. Every time you open a new credit account, the lender will report it. Most credit card issuers report credit limits, current balances and payment histories. If you've accidentally missed a payment, but have otherwise been in good standing, the credit card issuer may be more lenient. Call the company and ask nicely to have the infraction removed from your record. More often than not, they will oblige. However, you cannot do this more than once.

Damaging Credit Scores

If you have missed a payment on a credit card or a loan, it will show up on your credit report. A single missed payment will hurt your credit score, but it will not destroy it. Multiple missed payments are more serious. If you are more than 90 days in arrears, your credit score will drop by as much as 100 points. Defaulting on a debt will put your score well into the high-risk category. It will be almost impossible for you to get credit for at least a few years.

Improving Credit Scores

There is no quick and easy way to improve your credit score. You cannot remove negative information from your credit report unless it is incorrect. Accurate information will stay on your report for seven years -- 10 years in the case of bankruptcy. Meanwhile, all you can do is make the negative notations count less by building up a lot of positive information. This means making your monthly payments on time and paying down debt. Depending on your personal circumstances, you can raise your score by 50 points in a year.

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If My Credit Card Is Frozen, Will it Affect My Credit Score?

Handing your credit card to the waiter at the restaurant, only to be told moments later that it doesn't go through, is an unpleasant and embarrassing situation. If your credit card is locked because you failed to make minimum payments, your credit score may naturally be effected. On the other hand, a "credit freeze" is a wholly different concept with very different consequences.

Default

If you fail to pay your credit card bills on time, your financial institution will of course stop honoring your charge requests, even if your outstanding balance is well below your total line of credit. Credit card issuers will usually give you some time to make an overdue payment, usually weeks rather than days, before they will either inform a credit rating agency or decline payments through your credit cards.

While this situation is usually referred to as a credit card being "locked" as opposed to a "freeze," there is no universally accepted term to define this situation, which can lead to confusion. The bottom line, however, is that your inability or lack of willingness to pay your credit card bills will result in the issuer eventually putting a hold on your card and will negatively impact your credit score.

Fraud Investigation

If warranted, you can also ask your financial institution to stop honoring payments to a specific company or to all merchants while a fraud is investigated. If you suspect or have proof that someone stole your credit card information, this may be a prudent temporary solution. Such a "freeze" will not affect your credit score.

Cancelation

If what is meant by a "freeze" is a simple cancellation of a credit card account or one of the several credit cards in a joint account, such a move may or may not impact your credit score. Since agencies do take your total outstanding line of credit into account when calculating your credit score, a reduction in your line of available credit could negatively influence your credit score. The formulas for these calculations are complex and proprietary, however, and if the resulting decline in your line of credit is deemed inconsequential, your score may not move.

Credit Freeze

Finally, a credit freeze is much different from putting a hold on a particular credit card and involves making your entire credit history inaccessible to all merchants for a specific period of time. By contacting credit rating agencies, you can prevent anyone obtaining new lines of credit under your name or checking your credit score. This is often done if you suspect that an individual or criminal organization has gained access to a large amount of your personal data and could fraudulently apply for new lines of credit under your name. A credit freeze is free if your application is accompanied by a police report, but subject to a small fee without such a report. Such a freeze will not impact your credit report, but do keep in mind that all of your applications for credit, whether in the form of a car loan, mortgage or a new credit card, will likely be declined while the freeze is in effect. Merchants who cannot see your credit history will almost certainly decline to provide you with a line of credit.

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How to Remove Tax Liens & Judgments From a Credit Report

Obviously tax liens and judgments need to be avoided at all costs because they will ruin your credit score. But if it's too late for that, there are credit repair services you can hire that can help you. There are also things you can do yourself to help repair your credit record.

Instructions

1

Dispute the judgment with the three credit bureaus. The credit bureaus will check with the judgment creditor, and the judgment creditor has only 30 days to respond to the validity of the judgment. If they don't do it in time, the credit bureaus will remove the judgment from your credit report.

2

Negotiate with the judgment creditor if it verifies the validity of the judgment. You can do this by offering the company a monetary settlement. This will show up on your credit report as a dismissed judgment. This looks much better on your credit report than a judgment and even better than just paying it. When you come to an agreement about dismissing the judgment with the judgment creditor, have them put it in writing. They will then file the dismissal with the court and the court will report to the credit bureaus. You should have the judgment off your credit report within 30 to 45 days.

3

File a motion to vacate, or hire an attorney to do so on your behalf for a few hundred dollars. This is an option if you believe you were served with a judgment in error. Successfully filing this motion will get it off your credit report and you won't have to pay the judgment creditor.

4

Remove a tax lien by calling the IRS and asking to submit an Offer in Compromise. If you don't have enough money to pay off the tax lien, you can make an offer to the IRS to pay a fraction of what you owe -- if they accept your offer. Or, depending on how old your tax lien is, you may just want to wait out the statute of limitations. Call the IRS to find out when your tax lien expires to see when it will fall off your credit report.

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How to Create Triple AAA Credit

Excellent or "triple AAA" credit can lead to thousands of dollars in savings in finance charges over a lifetime. A three-digit number, called a credit score, reflects the current status of your credit. Privacy Rights Clearinghouse, a nonprofit consumer information company, reports that credit scores range from 350 to 850, with scores of 720 or higher indicating excellent credit. A credit score in the 720-760 range will lead to the best interest rates on credit cards, auto loans, mortgages, lines of credit and more. The FICO credit scoring system determines your credit score based on information on your credit report. Positive credit information is needed for excellent credit, while negative information reduces your credit score.

Instructions

1

Obtain your credit report and score. Order your credit report from AnnualCreditReport.com (see Resources). The website is the only site endorsed by the Federal Trade Commission to offer free credit reports under the terms of the Fair Credit Reporting Act. Order your credit score separately, for a fee, by following instructions on the credit report.

2

Review your credit report to identity any negative credit information, including accounts that are showing as past due or assigned to a debt collection agency. Make payments to bring all active accounts current. Then contact debt collectors to make payment arrangements on collection accounts. Ask debt collectors to delete negative information from your credit report in exchange for full payment -- a process called "pay for delete." The debt collectors aren't obligated to agree, but you can ask.

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Pay down your revolving debt. The MSN Money website reports that your balances on credit cards and other revolving accounts should not exceed 30 percent of your credit limit. Strive for even lower balances for excellent credit. Many people with excellent credit pay their credit card charges in full each month.

4

Open new credit lines. Apply for department store cards of full-featured credit cards such as a MasterCard or Visa. Make small charges for necessities and pay the cards off in full each month. The new accounts could help boost your score over time.

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Make at least the minimum payment on all your accounts before the due date. Timely payments and low credit balances are the two most important factors in creating excellent credit, according to Privacy Rights Clearinghouse.

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Track your progress by ordering a new credit report and score about every four months. You're entitled to three free credit reports a year from AnnualCreditReport.com -- one each from major credit bureaus TransUnion, Equifax and Experian. Your credit score must be ordered separately each time, for a fee.

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What Is Included in a Credit Check?

There are a number of different parties who may wish to check an individual's credit. These include lenders who are considering offering someone a loan; landlords who are considering renting someone an apartment; and employers who are considering hiring someone for a job. When someone checks another person's credit, he will see a report listing the loans that the person has taken out in the past and a score representing his creditworthiness.

Credit Report

When someone check's another person's credit, what he is really checking is the person's credit report. A credit report is a dossier of information that includes reports of all the forms of credit, such as loans and credit cards, that the person has taken out in the recent past and the disposition of this account. For example, if a person paid the loan back on time, the report will reflect this; if he was delinquent in paying, this will be noted.

Credit Score

The findings of the report are entered into a formula and used to calculate a credit score, a numerical representation of the individual's creditworthiness. Credit scores range from between 300 and 850, with the majority of people having a score between 600 and 740. The higher the score, the more creditworthy the credit reporting bureaus that compile the score believe the person to be. To a person seeing the score, this may indicate that the individual is financially responsible.

Effect of Checks on Score

When a lender or other party checks a person's report, it may actually affect that person's credit score. This is because a credit report includes a record of all the parties who have recently checked the person's score. If one of the parties who checked the score was a lender from whom the borrower is seeking credit, the person's score will actually be dinged a few points, as this may indicate the person is seeking to take on more debt.

Considerations

No everyone is allowed to check an individual's credit report. Under U.S. law, the checking of another person's credit report is limited to parties who have a "legitimate business interest" in knowing that person's credit history. In addition, in certain cases, a party will have to receive the person's permission before conducting the check. For example, in most states, employers are required to receive written permission from an individual before checking her credit.

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