Four Steps to Repair Your Own Credit and Avoid Credit Repair Scams

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Four Steps to Repair Your Own Credit and Avoid Credit Repair Scams-

Many companies claim that they can repair your credit. And truthfully, they may just be able to do that. However, YOU can do for yourself just what these companies can do and save a lot of money in the long run. Improve your credit with the suggestions outlined below:

1. Request a free copy of your credit report by visiting and FICO score from

2. Review the report in detail to ensure it doesn’t contain any mistakes that could be bringing your credit score down. If you find mistakes, take actions to clear them up and have them removed.

3. Start paying off your bills on time. Consider setting up automatic payments with your bank. Many banks will also provide you with email reminders to pay your bills.

4. Use the Debt Snowball Method outlined below:

The debt-snowball method of debt repayment is a form of debt management that is most often applied to repaying revolving credit — such as credit cards. Under the method, extra cash is dedicated to paying debts with the smallest amount owed. As each smaller debt is repaid in full, the monthly money used to pay that debt is then applied toward making additional payments on the next-smallest debt, and so on until all debts are repaid.

(This example does not add in the accruing monthly interest of the credit cards and loans making the balance amounts higher and payoff time longer.)
Consider using a debt calculator to create a payoff plan, and track your payment progress today.

A person has the following amounts of debt and additional funds available to pay debt (the debt is listed with the smallest balance first, as recommended by the method):
Credit Card A – $250 balance – $25/month minimum
Credit Card B – $500 balance – $26/month minimum
Car Payment – $2500 balance – $150/month minimum
Loan – $5000 balance – $200/month minimum

The person has an additional $100/month which can be devoted to repayment of debt.
First two months – under the debt-snowball method, payments would be made to the creditors as follows:
Credit Card A – $125 ($25/month minimum + $100 additional available)
Credit Card B – $26/month minimum
Car Payment – $150/month minimum
Loan – $200/month minimum

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Third month balance (presuming the person has not added to the balances, which would defeat the purpose of debt reduction) – Credit Card A would have been paid in full, and the remaining balances as follows:
Credit Card B – $448
Car Payment – $2200
Loan – $4600

Third month payments – the person would then take the $125 previously used to pay off Credit Card A and apply it as additional payment to the Credit Card B balance, which would make payments for the next three months as follows:
Credit Card B – $151 ($26/month minimum + $125 additional available)
Car Payment – $150/month minimum
Loan – $200/month minimum

Three more months (six total) – Credit Card B would be paid in full (the final payment would be $146), and the remaining balances would be as follows:
Car Payment – $1750
Loan – $4000

Then the person would take the $151 previously used to pay off Credit Cards A & B and apply it as additional payment to the car loan balance, which would make payments as follows:
Car Payment – $301 ($150/month minimum + $151 additional available)
Loan – $200/month minimum

It would take six months to pay the car loan (the final payment being $240), whereupon the person would then make payments of $501/month toward the loan (which would have a $2800 balance) for six months (with the last payment at $234).

Thus in 17 months the person has repaid four loans, with two of them being paid in a mere five months and three within one year.

Watch Video: How to Raise Your FICO Score

Source: Wiki Debt Snowball Method

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