Repair your own credit and start saving money.

There are several ways of rebuilding your bad credit, the try it yourself approach, not recommended, a law firm which can be very costly and software or credit repair programs like credit repair magic to help you effectively manage the task of repairing your credit. This article will list some of the areas that will be focused on in any effective credit repair program.

Use the following information as a "guideline" when re-building your bad credit. The reporting agencies have a computer model that generates the credit scores using 40 different criteria. That criteria is not currently disclosed. The models differ for each repository and not all financial institutions report to all three credit bureaus. Hence, the reason the credit scores from the three bureaus can differ from 50 to 100 points.

Removing Incorrect information

Generally the fastest and easiest way to get the first improvement in your credit score. Depending on how bad or low your credit score is, this alone may not raise your score high enough to help you achieve the result you are looking for.

Negotiating Settlements for Credit Cards

When negotiating for payment of credit cards, agreeing to pay part of the outstanding balance as total settlement allows the credit card company to report the settlement as a "Profit & Loss Write-off" on your credit report, and causes the account to be closed. The "Profit & Loss" listing can negatively affect your credit scores and may have the same scoring impact as a bankruptcy listing, and you now have one less open account for scoring purposes. A better solution, where possible, is to negotiate to have the interest rate reduced as much as possible (start with a request for 0% and negotiate from there), and negotiate to have all or part of the late charges removed (credited to your account). Then make minimum or above minimum payments, on-time, until paid off. This will keep the trade-line open for future scoring.

Negotiating Settlements for Judgments and Liens

Judgments and liens are slightly different with respect to a settlement. Make sure you clarify that the settlement will NOT be reported as a write-off to the reporting agencies, but rather reported as "Paid in Full". Get this in writing. I recommend starting at 50% of the outstanding balance and negotiating from there. Payment of current judgments and liens can positively affect your credit scores.

Negotiating Payment of Collections & Old Collections

Partial payment of any collection can result in a listing of "Charge Off" and/or "Partial Payment" on your credit report. This may negatively affect your credit scores. When you have a collection with a "reported date" from 24 or more months ago and with the last active date over 24 months ago, and you pay that collection, the account will be updated and the account will now appears as newly reported. This can have a short term period of creating a negative impact on your scores. However, collections need to be paid off before they can be removed from your report, so pay them as soon as you can, as zero balances are always better.

Your credit score affects everything. It affects the interest rates on your credit cards, home loans, car and recreational loans and even the annual premiums on your car and homeowner insurance in some states. Fixing bad credit is an essential step to a life time of savings.

Visit http://www.creditrepair-4you.com