Today we will take a look at the steps an individual should take after completing the CCRE program. If you haven’t had a chance to take a look at our article that explains how to preserve your credit before starting the CCRE, take a look before proceeding.
What Can Be Done After the CCRE Process?
Once the CCRE program is complete (or towards the end of the program – around the 12 month mark), there are still many other steps that you can take to begin the recovery & repair process.
The first step that most clients will take is to hire a credit repair agency to help them. Integrity Debt Solutions has a long & successful relationship with Lexington Law – a law firm that specializes in credit repair. Please visit their website at www.LexingtonLaw.com and learn more about the great success they have had for over 17 years now.
The cost of credit repair can run anywhere from $25 per month to $99 per month depending on the company and the degree to which you would like help. Since credit repair companies cannot charge for their services up front, their fee is an ongoing subscription and allows you to stop at any time. The average client will utilize this service for 12 months and improve their score anywhere from 50 to over 100 points on their FICO score.
Unlike our company which guarantees a certain level of success (at least a 50% reduction), credit repair companies cannot guarantee their service because results vary so much and some clients only “try” it for 2-3 months. However, in general, the clients who take this step more seriously are usually the ones who experience the greatest results.
Another strategy that our clients have implemented with excellent success after the program is the following. You can approach any banking institution and explain to them that you just went through a very difficult time, but you now want to start taking proactive steps to repairing your credit score. Ask them if they will allow you to deposit money in a CD (Certificate of Deposit) at their bank in exchange for a credit card for the same amount.
For example: If you plan ahead and save several thousand dollars while you’re going through our CCRE process, you can take $3,000 and deposit into the bank in a CD for a specified period of time (usually one year). In exchange for this deposit, ask the bank to issue you a credit card that has a $3,000 limit. Then, use this card wisely. Pay it off at the end of the month or at least the majority of it. If you carry a small balance on it and establish a track record, your credit score will improve dramatically!
Do this at a couple of different banks.
Another strategy that our clients have used is this: find a willing friend or family member who has a good credit rating and ask if they would be willing to cosign with you on a short-term loan. CitiFinancial and Beneficial are two places that you can go to in person. Again, explain to them that you went through a rough patch and you are now trying to reestablish yourself. Avoid Payday loans and the other quick loan places – they usually charge extremely high interest rates and they do not always report your on-time payments with the credit agencies negating the purpose entirely.
The most obvious way to improve your score is simply to stay up to date on all your current obligations and work on having negative entries removed. Diligence is the key here and credit repair can & will work. Rebuilding your credit can take a little time, but in about 2 years (depending on how diligent you’ve been), you can repair your score to such a place that it is actually BETTER than when you began our program! Yes, it can be done.
An issue that is extremely important to realize is that unsecured credit will impact your credit score less than any outstanding secured debt. The credit reporting agencies weigh more heavily the fact that secured accounts have been paid and are up to date. So if you have been able to stay current on your mortgage, car payments, and other secured loans (furniture, electronics, etc.) and will stay current in the future, this will be of great benefit & value to your score.
The three credit reporting companies have set up a central website, a toll-free telephone number, and a mailing address through which you can order your free annual report. To order, go to www.annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA30348-5281.
One last illustration we like to share in order to put things into perspective is this: suppose someone walked up to you today and said, “I will give you a check right now in the amount of $________ (insert 50% of your total credit card debt) if you will agree to one stipulation.” Of course, the stipulation is that you would have to live with bad credit for about 2 years. Would you be willing to take that check?
Most people will answer “Yes”. And since our average client has $42,000 in debt that they enter into our program, they are in essence receiving a check for $21,000 in order to have bad credit for a couple of years. A nice tradeoff indeed and obviously if your debt is higher so will your savings!
Our next article will help you analyze your current credit situation and decide whether or not the CCRE is right for you.