How can I repair my credit? I had some health problems in 1999, lost job so got behind on my credit card bills

I had alot of health problems in late 1999 and it caused me to be unable to work for some time. As a result I was unable to keep my bills current. At the time I was only 19 years old. I didn't have that many bills. I had 2 major credit cards - one a Providian & the other a Capitol One. The rest of the bills I had were credit from mail order catalogs that weren't even reported to the 3 major credit bureaus so those don't appear on my credit report. Basically, it's the 2 major credit cards that are on there. They both, the Providian and Capital One accounts wound up going to collections. I was also paying off a car at the time but I was able to pay that off to the bank with the help of my parents. I'm now 29 years old & married & my husband & I are wanting to buy a house with a home loan but my credit is not too good, because of the above mentioned situation & my husband's credit is pretty bad. I was advised to repair my credit before trying to get a home loan. How do I do that?

I'm sorry that happened to you. There's some things that you need to know about your score.

1. What makes up your score:

35% Payment History
30% Debt to Available credit Ratio
15% Length of time establishing credit history
10% Types of credit established
10% Inquiries and New accounts

2. What's hurting your score:

Providian & Captial One

3. What you can do to improve your score.

Ok, having said all that let's look at the bad stuff first. Let me start off by saying that there's what's called a statute of limitations for debt. One for collecting debt which varies by state. And the other is the federal 7Â½ year statute of reporting debt called the Fair Credit Reporting Act(FCRA), which starts from the date the debt first went delinquent. The statue of limitations(SOL) for collecting debt is pretty much the time in which collectors can take you to court to make you pay what you owe. (Click this link to find out what the SOL for your state http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml)

What this means for you is that if the SOL is expired you're legally not responsible for the debt anymore, however you still would have to present this as a defense if you were taken to court, and also you could use this as a powerful bargaining tool to deal with collectors.

It's a good chance that the SOL for reporting the debt may soon be expiring, so it could be used to your advantage to possibly wait it out. If you do decide to try to negotiate with the collectors, your goal is to neogtiate what's called a "deletion payment" which is making a payment in return for having it removed from your report. I posted another link that explains a little more about how to settle old debts( http://www.creditinfocenter.com/debt/settle_debts.shtml) but also keep in mind, you may not have to especially if the Federal statute may soon be expiring.

Let's say that you're fortunate and successful in getting those items removed, it could possibly hurt your score at first because you don't have any open lines of credit to compensate for the bad that you do have. The easiest way to do this would be by opening up a secured credit card. You would have to put a deposit upfront to get the same in a line of credit, but think of this as building credit with a savings account. This works especially well if you already have money saved up in a savings account that you're not touching for a while. Like for example, you mentioned in another question that you had money saved up for a down payment on a house. That could be used for the deposit, and you could get a credit line in the same amount. Make small purchases that can be easily paid off on time every month and usually after a year, you not only get the deposit/down payment money back with a little interest added, but also you've ilt credit to where the secured card will either convert to a regular one or a better card will be offered altogether. If you're going to save up for a down payment, you might as well make that down payment work for you. Oh, and I also forgot, while you're building credit add to the deposit/down payment money to increase your credit line. The higher the credit line, the better it will look on your report. Also you may want to try Orchard Bank as a 2nd major revolving account. They offer cards for people starting out and starting over, when it comes to credit. Then to round out your open revolving accounts, I'd try for a department store card, one that you'll use, but not overuse, for example home depot, lowe's, sears, etc. Since you've paid off a car already, that will help the installment credit portion of rebuilding your score.

Also, if you've been paying rent, utlities, phone, cellphone, and insurance you should enroll with PRBC to have it reported as alternative credit. The bills I just mentioned do not show on your regular credit reports, yet every month you pay, and some of those payments are more important than credit card bills! PRBC is a new credit bureau that feels these payments should be just as important. They score these reported payments in a report which can be used along with your regular credit reports as a supplement. These reports can even be useful in getting a mortgage (hint hint). I posted links to their website, which I strongly suggest you check out. I'm confident that they will help you. I also posted those links to help you deal with the current debt that you have.

I hope that this helps,

Good Luck!

If a person has accumulated a large amount of credit card debt due to multiple credit cards, the need for a proper counseling for credit card debt consolidation can't be understated. Credit card debt consolidation counseling helps a person get vital insights into the facts that can help him get control over the credit card debt.

Credit card debt consolidation counselors are experts with a good knowledge of debt management, budgeting and behavioral patterns of credit card holders. These services are vital for those struggling to manage their credit card debts. Also called credit counseling or debt counseling the credit card debt consolidation counseling brings immediate relief to a credit card holder.

A person seeking credit counseling can get it from two types of organizations. The professional or commercial organizations, and the non-profit organizations. As depicted by its name or categorization, the commercial organizations charge money for their credit counseling sessions and consolidation help on the other hand the non-profit organizations offer free of charge services. Just because the non-profit organizations are free, it doesn't undermine their quality of service. The persons associated with such organizations are thorough experts and have lived the trauma of being under credit card debt themselves and hence bring their vital experience to the credit card holder.

When a person approaches a credit counseling agency, the first thing it will do is to take stock of the situation and get various facts about the credit card debt. The credit counseling agency collects data about the income, expenditure and spending habits. It will guide the credit card holder about budgeting benefits and try to inculcate good financial habits. Read more from:http://www.credit-card-gallery.com/credit_card_debt_consolidation.html

Do you have a trusted advisor that you can get a referral to a credit repair program? Be extremely careful as to who you select to help you. Prices vary, length of time it takes to get through the program, etc. The most important point also is that you must be willing to do what must be done to repair your credit. You need to do what they suggest or you'll be throwing additional dollars away... Our firm works with home buyers in finding them a good loan program - we have credit repair sources we work with but you really need to be careful in today's environment there are credit repair places popping up everywhere... so, find someone you can trust.

This will take some time. I'm in the same boat as you. This is what I'm doing: I pulled me credit report from all three of the credit beauro companies (each one will be slightly different), I'm slowly but surely paying off all my debt. Once that gets to zero, it looks a lot better than having a balance. What you also need to do is write to each credit beauro an inquiry to take off certain things on your report. Example: If you have something that has been on your report at least 7 years and is paid off, write in and have them take that off your report. Once you get all your debt paid off or close to being paid off, get a credit card and make sure you pay everything on time. That will help your score go up. If yo have any other questions, ask and I can help you some. I'm working on mine as well and have done a lot of research on this. Good Luck!

You can go to www.creditinfocenter.com for a great deal of information on this very subject. Their forum is packed with information, and has been very helpful to me in my efforts to scrub my credit report.

One avenue you can go is hiring a credit attorney. They specialize in this sort of thing. Because of technical difficulties ... most of the time when credit card companies report to your credit report, they leave out a key detail or something.

Now it's not the cheapest thing, but they can usually get it stricken from your record. Your score should go up instantly once this is done. Check it out.

Here is an additional link.

http://www.ficocounelors.com

It depends on how much time you have and how much you wanted to spend. One site offers do it yourself credit repair for less than $20. Usually companies charge hundreds of dollars to simply pull your credit and send correctly worded dispute lettersâ€”this is the keyâ€¦..people will tell you that you can do this yourself for free but the truth of the matter is that the credit bureaus will throw your letters away or simply reject them. There is an easy to use online kit that will deliver the results you want available for just $19.95 at the source website. A similar kit is being sold via infomercials and radio talk shows for seventy dollars more but they try to solicit you repeatedly for other services after the fact.

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