Credit repair the ultimate guide to increase your cre, FICO score, remove negative items, ) oscar lyman

Credit Repair:
The Ultimate Guide to Increase Your Credit Score,
Decrease Your Debt, and Manage Your Finances


© Copyright 2017 - All rights reserved.
The contents of this book may not be reproduced, duplicated, or transmitted without direct written
permission from the author.
Under no circumstances will any legal responsibility or blame be held against the publisher for any
reparation, damages, or monetary loss due to the information herein, either directly or indirectly.
Legal Notice:
This book is copyright protected. This is only for personal use. You cannot amend, distribute, sell,
use, quote or paraphrase any part or the content within this book without the consent of the author.
Disclaimer Notice:
Please note the information contained within this document is for educational and entertainment
purposes only. Every attempt has been made to provide accurate, up to date and reliable, complete
information. No warranties of any kind are expressed or implied. Readers acknowledge that the
author is not engaging in the rendering of legal, financial, medical or professional advice. The content
of this book has been derived from various sources. Please consult a licensed professional before
attempting any techniques outlined in this book.
By reading this document, the reader agrees that under no circumstances are is the author responsible
for any losses, direct or indirect, which are incurred as a result of the use of information contained
within this document, including, but not limited to, —errors, omissions, or inaccuracies.


Table of Contents
Introduction
Chapter 1: What is Credit
What is Your Credit Score?
Chapter 2: How to Increase Your Credit Score

How Scores Decrease
Steps to Increase Your Score
Delving into Steps 6 and 7
Final Tips
Chapter 3: How to Decrease Your Debt
Method for Getting Rid of Debt
Credit Card Reduction
Reducing Your Overall Expenses
Chapter 4: Establishing Good Debt
Steps to Build Proper Debt
Chapter 5: Manage Your Finances
Creating a Budget
Re-evaluating Your Budget
Staying Strong Against Consumerism
Conclusion


Introduction
Credit—it is a word we can learn to hate; particularly, when we get into a situation that requires us to
repair it. You can improve your credit, but not with magical solutions. Your credit and your FICO
score will not be corrected overnight with any techniques you may read about, even here.
It takes time, persistence, and determination to meet your financial goals to see a resolution. Luckily,
you have access to a guide that will offer you step-by-step instructions that anyone can follow.
You will first learn about credit, your credit scores, and types of debt. You will gain knowledge for
how to increase your credit score and the major complications that can arise to decrease your score.
This guide will explore methods to reduce your debt while establishing good types of debt that help
you in your financial stability.
Eventually, you will gain insight into managing your finances better. It is possible to live debt free,
with excellent credit, and top-notch financial management.
The secrets are within these pages, all laid out for you to read through and understand with ease. The

first step you will take right now is to determine what your financial goal is: do you want to live debt
free, with minimal debt, buy a home, or make your score 800? Set your goal and then follow the steps
to ensuring it happens.


Chapter 1: What is Credit
Credit is a form of purchasing by borrowing money that will pay for goods or services. Credit is
provided by a grantor, whom you will pay back per the agreement. You will pay the amount you spent
plus finance charges, at an agreed upon time.
Finance charges are also known as interest fees, which is a percentage based on the sum of money
borrowed. You may already understand this definition, after all, you are reading this book because
you need to repair your credit. However, it is also possible that you need to improve your credit
because you have little credit history.
Most of us understand the larger definition of what credit is but do not stop to consider the types of
credit that can impact your credit history, including improving or worsening your credit score.
Four types of credit exist. Revolving credit is like a credit card, where you have a credit limit that
you can charge up to, and each month you carry a balance, paying a minimum payment to keep
spending on that credit line.
Charge cards are in certain ways like credit cards. You have a limit. You can spend up to that limit;
however, charge cards require you to pay the entire balance at the end of the month or on the payment
date.
Service credit is a credit agreement for services, such as mobile phones, electricity, and gym
memberships. You pay the amount each month based on usage or a specific service charge. Some
companies like cell phones report this credit to the reporting agencies.
An installment loan is available in two types: secured and unsecured. Secured Installment credit is a
mortgage or car loan. You used a particular amount of money to make a purchase, agreeing that for
three to thirty years (depending on the type of loan) you would make a monthly payment. Interest and
taxes are part of the agreement. Unsecured loans are those that are not backed by goods. A personal
loan that does not have collateral, such as a house backing it, is an unsecured loan.
Credit is a necessary part of life if you want to own certain things, such as a home or car. Most of us

do not make enough from our salaries to cover a massive purchase. Good to excellent credit is the
best way to buy a house or car because it can help you obtain a lower interest rate. Credit is also used
by landlords to accept or deny a rental property to you.
To obtain credit, most grantors will assess how much credit history you have, if this history is in good
standing, and whether your debt to income ratio is in proper balance.


If you have more debt than income, it is possible for your credit score to be lower than excellent or
good, and someone may deny giving you credit for fear that you will have too much debt.


What is Your Credit Score?
Your credit score is a three-digit number created using an algorithm to rate the information on your
credit report. There are a few credit scoring models out there, but creditors typically look at your
FICO score. FICO scores range from 300 to 850. Anything above 750 is considered excellent. You
want your score to be anywhere from 700 to 850 to get the best interest rates for the credit you need.
Scores above 700 are good. Scores between 600 and 700 are fair, and anything below 600 is not
good.
When calculating your score, the payment history, amounts owed, length of history, types of credit,
and new credit matter. Personal and demographic information is not applicable to the score.
Your payment history accounts for 35 percent of your score. This history assesses your ability to pay
on time, without creating delinquencies. Missed payments and late payments lower your score.
The amount you owe for all your accounts counts for 30 percent of your score. Companies look to see
how much credit you have and how much you have used on revolving credit accounts. If you have
more than 50 percent of the credit limit used on credit cards, your score will be lower.
The length of your credit history counts for 15 percent of the credit score and assesses how long you
have had credit accounts open and the account activity. The score is evaluating if you consistently
close and open new accounts or keep accounts open for several years.
The types of credit you have are 10 percent of your credit score. The company creating the score
looks at revolving and installment accounts to determine if you have a fair spread of both types of

credit or tend towards one type.
New Credit is also 10 percent of your score. This part of the score views new credit pursuits,
including the number of new accounts and credit inquiries that have been made.
Some companies reporting to the credit agencies do so each month, but many will report your history
every three months. Typically, the average is taken for those months, so if you make one late payment
it may not appear, but if you make two late payments, it will be recorded.
Certain types of credit count more than others, such as student loans and car loans. Car loans are
weighted more in your score than student loans. If you walk into a car dealer with only student loans,
four years of rent payments, and low balance/low limit credit cards, you are seen as a person without
a credit history. Your scores may be in the 700s, but the interest rate will be higher than someone
with multiple credit cards, car loans, and a mortgage because you lack credit.
The above factors are imperative for your understanding of repairing your credit.



Chapter 2: How to Increase Your Credit Score
Numerous situations can impact your credit score. Obviously, how much credit, the amount you owe,
the length of your history, types, and new credit form your score. However, what are some things that
may decrease your score?


How Scores Decrease
The following are the top reasons your credit scores decline.
High debt to income ratio
Credit utilization ratio
Applying for new credit accounts
Payment history (particularly a negative history)
Derogatory marks, including accounts in collections, tax liens, and bankruptcies
Age of open accounts
Total accounts you have and whether you have a mixture of types of credit

You can take steps to increase your credit score. Everyone’s situation is different. You may have
accounts in collection and be able to pay those off within a few months, with a new agreement.
Someone else may have a bankruptcy, which will be on your record for seven to ten years. According
to FICO Chapter 13 bankruptcies are on your record for seven years and Chapter 7 filings remain on
your report for ten years. Other negative information such as late payments will be on your record for
seven years.
Unfortunately, the credit reporting agencies (Experian, Equifax, and Transunion) do not always clean
your record after the appropriate length of time. You may need to actively request information to be
removed from your credit history, negative details, to improve your score.


Steps to Increase Your Score
It is time to learn what you can do to improve your score. The steps in this section are proven
methods for you to follow. You may not have some of these issues on your credit report, so you can
skip steps if they do not apply to you.
1. Visit one of the credit websites that offers you a free credit report. Just type “Free credit
report, ” and the main supplier of credit reports will pop up. Some places like MyFico
charge you per month for your report and scores. Your score is not always free; however,
your credit report should be. You can also approach all three credit reporting agencies to
have your report sent to you.
2. Assess your credit report for accuracy. Are there phone numbers, addresses, and
accounts that do not belong to you, but appear on your report? Sometimes reports have
inaccurate information because the reporting party enters misinformation or similar
names and addresses on your report.
3. You can send a letter or fill out a form online to dispute all inaccuracies. Any address,
telephone number, or credit inquiry that you did not allow can be removed. These
elements do not impact your score other than to assign credit that is not yours. An
increase in credit inquiries will lower your score as it factors in the calculation. The
lower score is why you want to dispute any information that is incorrect.
4. You must dispute any lines of credit and accounts that are not yours. If someone has

stolen your identity, you may have accounts open in your name. You need these removed.
5. Are there old accounts hindering your score? Anything that is seven to ten years should
automatically fall off; however, sometimes the information does not. You have the right to
ask for information to be removed from your credit history if it is doing you a disservice.
Let’s say ten years ago you missed a couple of payments. You can have those marks,
which go against you, removed. In fact, you can have the entire account removed if it is
no longer open. The length of credit history and type of credit history is important, but
late payments or missed payments hurt your score more than having a longer history will
help. Any accounts you still have open need to remain on your credit history, even if they
have troubling information—just remember old enough data can be removed.
6. It is time to assess your credit utilization. First, how many accounts do you have that are
open and active? What types of credit are these accounts? If you have credit cards, do
these credit cards carry a balance higher than 50% of the credit limit? Secured loans and


revolving credit weigh more than bank accounts, savings accounts, student loans, and
service accounts. If you can show you keep on top of your installment agreements and you
do not carry credit card balances that are more than 50% of the limit, your score will be
higher.
7. What is your debt to income ratio? If you make $50,000 in a year but have $150,000 in
debt, then your debt to income ratio favors more debt.


Delving into Steps 6 and 7
Step six has its protocol to follow. You are not going to run out and buy a new car, secure a mortgage,
or add more credit to your credit history just because you may lack a few times of credit. It will not
be prudent for financial management purposes, and furthermore, it will not improve your score
enough to warrant such action. Instead, you need to determine where you stand with the credit you do
utilize.
With step seven being about how much debt you have, you also need to consider what actions you can

take to reduce your debt and create a more favorable debt to income ratio.
1. Start with credit cards. Are there any credit cards with a low balance that you can
immediately pay off? For example, if you have a credit card with $200 and you have
$5,000 in a savings account, use $200 to pay off the credit card. You have a credit card
with a zero balance. Your debt amount is also lower.
You may have a situation where you have three or more credit cards, all with $5,000 or more in debt,
and limits that are near $10,000. If you do not have the savings to pay off all those credit cards, then
you need to follow step 2.
2. Take some of your savings to reduce all your credit cards to a balance of 49 percent of
your credit limit. If your limit is $10,000, then you should have no more than $4900 as the
balance on your card.
By reducing the debt, you have your debt to income ratio appears in a better light; thereby, increasing
your score over time. Furthermore, by reducing your debt to less than 50 percent of your credit limit,
you are going to see an increase in your score.
Credit utilization and debt-income ratio assessment are going to help you in the next chapter as a
means of lowering your debt. It is handy that if you work towards increasing your credit score, you
also work towards lowering your debt.


Final Tips
Set up payment reminders for all of your credit accounts. Missed or late payments will
stop happening once you take control of your financial situation; thereby, increasing your
credit score.
Do not go out and open new credit cards just to make your other credit cards lower than
half the credit limit.
Do not close credit accounts just because you are not using them. Keep the history on your
report, as long as there are no problems, such as liens or marks against you from the past
on those accounts.
Get current on all of your accounts. Once you return to making payments, on accounts you
may have recently struggled with; your score will begin to improve.

Always pay off debt instead of moving it from card to card, as this will better your score
versus opening new lines of credit or going from one card to another with balance
transfer deals.
Open new accounts only when needed, such as moving to a new state that does not have
your bank.
Have credit cards, but manage them responsibly.
Re-establish your credit history if you had trouble in the past by opening new accounts
when necessary and making on-time payments till your accounts are paid off.


Chapter 3: How to Decrease Your Debt
Decreasing your debt is a priority if you are struggling to pay bills. It is affecting your credit score.
You can also reduce your worries. One of the biggest issues right now for the world is too much debt.
People cannot afford their lifestyle and stress begins to eat away at them. The tiny house movement
and Hygge (Hooga) are big because people are finding they can be happy living minimalist lifestyles
without any debt.
Stress can kill. Do not let it affect you anymore. Take action by reducing your debt through the method
listed.


Method for Getting Rid of Debt
1. Open an Excel spreadsheet, get a piece of paper, or use a word processor. List all of
your debts, all the credit cards, medical bills, student loans, mortgages, secured loans,
equity loans, car loans, and anything you “owe.”
2. Put the entire balance next to the type of loan. If you have three credit cards, list all three,
with their current balance.
3. In the next column list the interest rate you pay on the loans. If there is no interest rate,
such as medical bills, leave it blank.
4. In a fourth column list the terms of the loan. For example, car loans can have up to 60
months to pay it off, whereas a mortgage may offer 30. How many years of those

payments do you have left—list those years or months—not when you started making
payments.
5. When you see your debts in black and white, it often motivates you to move quickly;
however, you need to be smart. A mortgage is not something you have money in savings
for, so do not expect to pay it off early. What you want to work towards is paying all your
expenses each month and putting 20 percent of your income in savings accounts. More
will be discussed on financial management. For now, determine what debts you can pay
off with money you have in savings.
For credit score purposes, if you do not have enough in savings to pay all debts off, make certain you
pay enough to each debt to show a credit utilization below 49 percent.


Credit Card Reduction
Paying off credit cards requires a special formula if you cannot pay off all the cards at once with your
savings. To improve your credit score, you want your cards below 49 percent of the credit limit.
Obtaining a lower debt usage may not be feasible right now. It depends on the amount of savings you
have and how many cards you have. If you cannot get your cards below 50 percent, then you should
determine if you can pay more than the minimum payment to one card.
Let’s say you have $100 left over at the end of each month. This $100 has been going to savings, but
you already put 20 percent of your income in savings. You will apply this $100 to one of the credit
cards. There are a couple of theories for this method. Some experts will tell you to pay off the lowest
balance card first, while others will tell you to pay off the highest interest rate card.
It will depend on your psyche for what method you choose. If you need to feel optimistic about
reducing your debts, pay off the lowest balance card first. It gives you a boost and keeps you going in
your fight against debt. If you understand the higher the interest rate means, the more of your money is
going to interest and not the principle, then you will feel an urgency to pay off the card with the
highest annual percentage rate.
1. What card has the highest APR? What card has the lowest balance? Can you move money
around for a more favorable situation? Let’s say your card with the lowest balance is
using 10 percent of your credit limit and has the lowest APR, and a card with the highest

APR has 80 percent of the credit limit used. You can move 39 percent of the balance to
the lower APR card. Yes, for credit score purposes you are told not to move money
around; however, to get rid of your debt it is a necessary issue. Now keep in mind, you
have to assess the transfer fee as part of the overall percentage of use.
2. After the balance transfer, you will start to allocate extra funds to the card with the
highest APR. You still make the minimum payments on all your debts, but you put more
money towards one debt with the highest APR.
3. As soon as the card is paid off, you will have the minimum payment plus any additional
funds you paid towards that debt to put towards another card.
4. Once the next card is paid off, you move to the next card, this time with both minimum
payments from the first two cards plus the extra income you sent towards paying the card
down.
5. Eventually, you make it to the last card.
6. You always want to start with credit that has higher APRs, which will be credit cards.


Freeing up the minimum payment money you sent for those debts, you can start to allocate
the money towards other types of debt.
It is imperative that you maintain all payments to your debts. If you cannot find extra income to start
reducing one debt at a time, then you may need to seek a legitimate credit counselor or reconfigure
your financial management system, as well as your lifestyle.
Money can be saved if you know where to look. It can also be scary to tap into savings accounts that
you have simply to reduce the debts you have, but it may be necessary.


Reducing Your Overall Expenses
Debt piles up because you start to live a lifestyle that is beyond your income. Sometimes it is
necessary. You may need to buy a new car to drive to work or put an expense on a credit card to keep
your car running. You may have taxes you owe due to few deductions. No matter how you get into
debt, making changes to your financial management and lifestyle will help you reduce those debts.

1. Use savings when you have it to reduce your highest APR debts.
2. Leave non-interest rate debts for last. Yes, you will need to make payments on
installment agreements, such as medical bills to keep yourself out of collections.
However, you can make minimum payments instead of paying off a debt that has no
interest or fees.
3. If a bill comes in pay, it right away if you have money in your account for it that is not
needed for other bills and expenses. Do not leave yourself open to spending money on
dining out, entertainment, and other less necessary things because this increases your
debt.
4. Seek settlement options with certain debts if applicable. If you know you are about to
miss payments because of job loss, request a review of your account, reduction in interest
rate, or possible settlement to pay off the debt.
5. Reduce your expenses in any way you can. If you pay for Amazon Prime, cut the ties for a
year until other debts are paid off. The same with other subscription accounts that you do
not need for work. The money from these expenses can be used to pay off debts that
continually add interest to your account.
Other methods for reducing your bills and keeping your credit score high will be discussed in
financial management. For now, concentrate on the steps to pay more to high-interest rate debts and to
manage other debts with on time, minimum payments.


Chapter 4: Establishing Good Debt
Some debt is better than others. Credit card debt is easy to start using incorrectly. As you make on
time payments, credit card companies, send you new offers. They increase your credit limit. Credit
card companies are rarely willing to lower your interest rates even if they offer a higher credit limit.
Revolving debt has its uses to show that you are capable of making on-time payments, as well as
paying off the entire balance before the interest fees are added. But, they take self-control.
You are wiser to go with “good debt” options, such as car loans, mortgages, equity loans, and other
secured loans. Secured loans with installment agreements can be paid off early or within the
appropriate time limit. They show proper payments, as long as you make payments on time, and

establish that you can be trusted.


Steps to Build Proper Debt
1. Return to the list you made regarding the types of debt you have.
2. Now that you have eliminated your credit card debt, you want to avoid using the cards for
anything more than you can pay off that same day. In other words, if you spend $40 on
fuel for your car, you should be able to go home and make a payment to the credit card to
pay it off. You want to keep your credit card accounts open, active once per month, and
use them to establish a good pattern of behavior. By using the card, it shows fraudsters
that they cannot steal an inactive account. The credit card company can also report that
you are in good standing. If there is no activity, they are less likely to report anything to
the three credit bureaus.
3. Have you ever purchased a car? If you have not purchased a car and need a dependable
vehicle, use a car loan to establish proper debt. First, the vehicle is useful. Second, the
loan is an installment type with a set period to pay the debt back. An installment loan is a
proper debt to have. Make your vehicle choice wisely. You need a vehicle that will work
in your area. For example, if you live in the mountains and purchase a front wheel drive
car, chances are you will have to park it during snow storms. You are then paying for
something you cannot use. Do not go out and get a car loan if you do not need a car. If you
live in the city and will never drive a vehicle to work, don’t spend the money. You do not
need good debt just because you want to enhance your credit history. When you do get a
car loan, have at least 20 percent for a down payment and try to obtain a loan for two or
three years, if the payments are feasible.
4. Mortgages are another type of installment loan that are proper debts to have. Renting
helps with certain credit history, such as living in the same place, making rent on time,
but it is a mortgage that will offer the best credit history. A mortgage payment is high, so
there will be a bump in your credit score, but making on-time payments will take care of
that small dip. Furthermore, you have an interest in your future that shows stability. You
have shown that you want to live in one place for three decades. The key piece of

information about a mortgage being proper debt is that you can afford the payment you
need to make. You will have the 20 percent down payment. You will have six months of
mortgage payments saved in the bank, and you will have the monthly payment as less than
or equal to half your monthly income.
To have proper debt, you require a low debt to income ratio. Your bills should not exceed more than
50% of your income for the month unless you have a mortgage. Ideally, you want 20 percent of your


income going to savings for retirement, 10 percent for emergencies, and less than 50 percent as a
mortgage. Proper debt is having money left over at the end of the month that has no assigned place to
go.
When you reach a point of having expendable income where you can enjoy a holiday, entertainment,
and dining out occasionally, then you have a proper debt situation. You are not being told to go out
and obtain more debt just to make it “good” debt. You need to make educated choices on the types of
debt you add to your credit history based on your life.
You may not be ready for a mortgage. You might wish to rent because you want to move to a better
city or move overseas. The point is that you work towards lowering your debts, obtaining excellent
credit scores, and maintaining a low debt to income ratio for when you need to add to your credit
history. If you start taking out new debts just to have “good” debts, then you are not repairing your
credit—you are adding to the out of control situation you have been in—avoid letting money be the
driving factor.


Chapter 5: Manage Your Finances
Repairing your credit has led us to manage your finances appropriately. It is very easy to get into
debt, let your credit scores become deplorable, and ruin your financial future. You want to repair
your credit, or you would not be reading through the information presented to you.
You can take all the steps in the world to repair your credit, but to make it work out, you need better
financial management. Thankfully, there are steps and solutions you can take.

Creating a Budget
It is time to create a budget to stick to your plan of becoming free of debt, establishing better credit,
and increasing your credit scores. There are Excel spreadsheets you can download, or you can create
your own.
The key to your budget is to have all income listed, then start listing your expenses. A spreadsheet
helps with this because you can see how much debt you have in certain categories. Many budget
sheets have monthly expenses, unsecured/secured loans, housing expenses, and dispensable income.
It is possible to set the spreadsheet up so you see how much you spend in each category, what you
have left and what you should assign to savings. You can also see whether you have enough income
for all the expenses you have listed and plan, on a monthly basis, for expenses that come infrequently.
1. List all your income sources
2. List your expenses, such as service expenses, auto expenses, and others
3. List your credit cards
4. List your loans
5. List any savings or retirement contributions
6. Total the expenses and minus them from your income to see what you have left at the end
of the month.