How to Fix Bad Credit Fast | Repair Your Credit Report
Running Time: 7 minutes
Wait…. My credit score went up! HOW MUCH?!
In this video, we’ll talk about bad credit, and how I raised my Experian credit score a whopping 155 Points in 4 months. I kid you not. The credit reporting system is completely broken, and it can be easily rigged in your favor. You just need to take a few extra steps, and you can go from defaulted loans to primo loans in a matter of months.
But stick with me a few minutes, and you will find out exactly how I went from a 575 score to a 720 score. You won’t believe it, because I don’t believe it. But I did do it, and, and you possibly can too. Because right now, you may think you have to put up with what these banks and collections agencies do to your credit, but you don’t need to take it lying down.
There are definitely steps you can make to improve your credit score, and do it quickly. I have a few tricks that I have done in the past year that have brought my scores up significantly. Stick with me, follow my advice, and we’ll get your scores up in no time.
I am a freelancer and I lost my biggest client. The next few months saw me default on several loans, and I became a financial mess. But my wife’s scores remained solid, so I took advantage of that.
How I Removed Debt and Increased My Credit Score
Over the course of 6 or 7 months, I made several moves to get our debt under control, and raise my own credit scores significantly.
The first thing I did was take out a $12,000 personal loan. With a predictable fixed monthly payment that was lower than the multiple cards, allowing me to focus on paying down the single debt, while enjoying a HUGE increase in my credit score. Remember, larger Personal Loans damage your score less than credit cards with the same amount on them. Banks know that the amount can never increase, so it’s a predictable number. With this money, I paid off all of my wife’s small store credit cards and other non-credit related things, like paying up current and future bills. The goal here is to lower the DTI, Debt To Income ratio.
With my wife’s credit cards now empty, I attached my name as a Joint Account. This means all of her credit history, along with her DTI, gets passed onto my own account. You can use anyone, so if your parents are able to help out, this method works great because it won’t affect their credit at all. Just hand them the card that comes in your name, and now you can’t actually use the account. But doing these two things raised my scores around 35 points across the board, so it was well worth it.
The $12,000 loan wasn’t enough for us, so I took advantage of a $7,500 interest free Discover card. Doing this does NOT lower your credit score, in fact it will likely hurt it by having a large sum filling up the available credit on a single card. However, this does lower the monthly interest paid, and simply use that to pay extra on this interest free card.
Next, I requested larger credit limits. A bigger credit limit can serve as a buffer before you actually need to pay. Just be sure not to get tempted into spending more for unnecessary stuff just because you’ve got a bigger leeway. For us, we use two cards. One for business, and one for personal. I am then sure to pay them both off every one or two weeks so I don’t fall back into debt. Constant usage shows the bank that we can manage our credit by paying it back early every month. This leads us back to the bank offering us higher credit limits.
Once all of the framework was setup, next came paying off outstanding debt. As I already used the loan to eliminate the high interest credit cards, I really focused on getting rid of mid to low interest debts by using the avalanche method. This means throwing all of your money into the highest interest debts first, and paying back the low interest debts second. The more you get paid back, the less you owe. Once again, this continues lowering the DTI and saves more interest in the long run.
Credit Repair Companies
Lastly, I signed up with ScoreShield Financial Group. You may have heard of them, as they have a YouTube channel called “Keeping It Real With Credit”. I asked them to do a collaboration video with me, but they didn’t seem too interested. So, let me tell you what I really think, after being with them for a year.
My scores are definitely higher than they used to be, and my record is cleaner than it used to be. However, the cost was over $1,200 in payments to have them clean up my credit report. So what did they deliver on? My Equifax score went up a whopping 120 points! This was amazing, and I was really looking for similar results at the other two bureaus. Unfortunately, Equifax was a lucky shot, because Transunion went up 52 points, and Experian only 42 points.
The company itself was quite easy to work with. In fact, mid-pandemic I asked them to suspend my account and they did. A few months later I went back to see what else they could clean up, but this was fruitless, as they did all the big moves inside of the first 4 months.
As such, my recommendation would be to use a company like this for a few months, then drop them. If you want to pursue a deeper cleaning, then sign up for a pay-per-removal. It would likely cost more per item, but ultimately less than a monthly fee going forward. While they never pressured me into staying, but I kept getting paperwork sent to me by the creditors I needed to forward onto them, so I was always hoping to get a bit more removed.
How Did My Overall Repair Go?
On my own, I went from 575 starting scores to Transunion 614, Experian 617 and Equifax 610. So, I went from worse to bad. Once the ScoreShield came on, they went up to Transunion 666, Experian 659 and Equifax 720. In the first 3 months, they had a majority of these scores already, and by the 4th month, they had all of it. These days, I just maintain my monthly payments, and these numbers can tick up slowly as I lower my overall DTI by paying off my wife’s car and our last personal loan.
After a year and a half, I finally decided to try for a basic credit card. Just today I tried for the first time to get a simple credit card, and was denied. As usual, I became enraged, and just paid for it with cash. While I wanted to take advantage of 0% interest rates, these banks and lenders just make it so complicated.
But in general, you will be happier once you start living a cash based life. Either you have the money for what you want, or you don’t. You won’t have any bounce fees, late fees, or minimum payments if you pay for everything with cash. This past year I bought a mattress, couch, and new camera gear all with cash. It’s expensive, so I would rather have payments and 0% interest, but hey, whatever.
I’ve wanted to do this video for almost a year now, and I really thought the results would have been better. It’s nice to have the credit cleaned up, but for what the agency charged, $720 in the first 4 months, it just wasn’t worth it in the long run. The first time I tried to use the credit a year and a half later, I got denied anyway.