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Just Ask Shannon – Restoring Credit

February 6, 2008

Restoring Credit

Dear Shannon: I just watched your appearance on BET, and you have answered some questions that I wondered about. I’m currently in the process of restoring my credit from past due credit cards, and all I have left to settle is some old school loans. Being that I now have “bad credit,” what ways can I raise my credit score? I can’t get another credit card because of the bad reports that I have now; so, what other ways can I raise the score? Marlon, from Metairie, La.

Dear Marlon: Thanks so much for watching. The good news is that you are working on having a plan to raise your credit score (aka, FICO score) and that is often the hardest step for folks to take. Once you have come to terms with the fact that you must do this, and do it now, follow these easy steps:

1. Get a copy your credit report. You can get a free copy at www.annualcreditreport.com. Go through each item on the report to see what debts you can pay off in full, and which debts you need to request a payment plan. You may also see errors on the report which you may be able to remove (See “Disputing a Credit Report” below).

2. Contact the creditors and make your deal. Remember to be firm and request that, in exchange for you paying off the debt, they remove their negative information from your credit report. Many creditors will do this, but not all. For those who don’t, request that they show that the debt has been paid in full; or if doing a payment plan, that the account is up-to-date, and that you are current on your payments. Whatever happens in this step, make sure that you get the final result in writing!

3. Review your credit report again in 2-3 months. You should see begin to see improvement with your credit score.

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