12-Step Credit Repair

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One of Advocating Community Equity’s main purposes is to help those who want to achieve financial literacy in order to promote financial responsibility and independence do so. Improving your credit score is a crucial financial goal, because it impacts your ability to secure loans, credit cards, and lower interest rates. There are many paths to achieving financial independence. If you or someone you know would like a place to start; here is as good as any!

Step 1: Obtain Your Credit Report and Credit Score

• Request a free annual credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) directly or through AnnualCreditReport.com.
• Obtain your credit score from a reliable source such as your credit card company or one of the sources listed above..

Step 2: Review Your Credit Report

• Carefully review your credit report for any errors, inaccuracies, or fraudulent accounts.
• Dispute any discrepancies by contacting the credit bureau reporting the error, providing evidence an documentation.
• Ensure your personal information is accurate.

Step 3: Create a Budget

• Analyze your income, expenses, and debts to understand your financial situation.
• Develop a realistic budget that allows you to meet your financial obligations and have some money left over for debt repayment.

Step 4: Pay Your Bills On Time

• Timely payment of bills is one of the most critical factors in credit scoring.
• Set up reminders or automatic payments to ensure you never miss a due date.
• Establish a consistent track record of on-time payments.

Step 5: Reduce Credit Card Balances

• Aim to keep your credit card balances below 30% of your credit limit (lower is better).
• Pay down high-interest debts first and work towards zero balances.
• Avoid transferring debt from one card to another; focus on reducing the principal.

Step 6: Avoid Opening Unnecessary Credit Accounts

• Each new credit application can result in a hard inquiry and a temporary dip in your credit score.
• Only open new credit accounts when necessary, and consider the potential impact on your credit score.

Step 7: Use Different Types of Credit 

• A mix of credit types, such as credit cards, installment loans, and retail accounts, can positively impact your credit score.
• Only take on new types of credit when they fit into your financial plan.

Step 8: Build a Positive Payment History

• Continue (or begin) to make on-time payments consistently.
• If you have no credit history, consider obtaining a secured credit card or becoming an authorized user on someone else's credit card to establish a positive credit history.

Step 9: Negotiate with Creditors

• If you're struggling with debts, contact your creditors to negotiate lower interest rates, payment plans, or settlements.
• Ensure any agreements are documented in writing.

Step 10: Monitor Your Progress

• Regularly review your credit reports and credit scores to track your improvements.
• Many credit card companies and financial institutions offer free credit score monitoring services.

Step 11: Be Patient

• Improving your credit score takes time, and there are no quick fixes.
• Continue practicing good credit habits and be patient as you wait for your score to improve.

Step 12: Seek Professional Help, if Needed

• If your credit situation is exceptionally complex or you're struggling to make progress, consider working with a credit counselor or a reputable credit repair agency.
• Beware of scam artists offering quick fixes in exchange for a fee.

Remember that improving your credit score is a gradual process, and it may take several months to see significant changes. Staying disciplined with your financial habits and monitoring your progress will eventually lead to a better credit score and greater financial stability. Luck will not factor into your success for this goal. So, instead of luck we offer you these types of materials as support while you use your determination to achieve your goals!