It is fraud victims' lament, severely damaged credit rating.

Whether your a fraud victim, or just a victim of careless / negligent credit reporting bureaus, the outcome is the same:

The practice of employers checking your background using Investigative Consumer Reports to decide if you make a good employee is common practice.

The problem is, especially for fraud victims, is the reports are misleading, especially when identity theft is involved.

The steps below are based on life after the fraud and you have the mess cleared away and are ready to begin rebuilding your life. Starting over.

11 Steps to Better Credit

1. Acquire Payment Accounts. Maintain a small number of revolving accounts with high limits, and pay off the balances each month.

The key to this working is to only charge small amounts that you have the budget to pay off in the next billing cycle.

2. Limit Number of Accounts. Don't apply for credit indiscriminately. "Lots of 'hard inquiries' in your credit file will damage your credit rating," says John S. Davis, a financial adviser and certified financial planner with Mentor Capital Management in Elmhurst, Ill.

3. Opt Out. Call the Opt Out line to have you removed from company's gaining access to your credit report for pitching offers. It is toll free. You'll have the option of opting out for five years, which is what they will automatically place on, unless you tell them, "I want out permanently." Call: Opt Out: (888) 567-8688

You also have the option to -----

4. Stop Inquiries on your Account. Do not allow companies to do unnecessary inquiries on your credit account, says Elaine Scoggins, a certified financial planner in Seattle.

Example: shopping for a car, major appliances, or home loan, refuse to provide your social security number or private information to anyone. Sales people will pressure you, telling you its okay. NO! It's Not! Tell them you just want a ball park number. Stand firm. If they refuse, you do not want to deal with that company. Every time one of them checks your credit, it dings your credit rating.

"If you don't need it, leave it," says Scott D. Cole, a certified financial planner in Bessemer, Ala. "Only seek credit when you need credit. Ten percent of your FICO score is based on new credit account opened."

5. Get a new credit card and don't use it. Your FICO score is based upon a ratio of the overall percentage of outstanding debt divided by available credit, says Bedda D'Angelo, a fee-only certified financial planner and president of Fiduciary Solutions in Durham, N.C. "A new credit card increases your total available credit," she said.

6. Larger Payments than Required. Get yourself in the habit of being disciplined. Do not max out your card and always make larger payments than the minimum and make them on time -- no matter what.

This means if the payment is due June 20, send the payment or make the payment at least five days before the due date. See on this web site, Frontline's investigation about the predatory practices of credit card companies. You want to protect yourself by making the payment on time and more than expected.

7. Downsize Debt. One of the most damaging aspects of credit card debt is owing more than the limit on the particular card. Pay this portion first.

Try negotiating interest rates with your credit card company, advises Penny Marlin, a certified financial planner and financial adviser in Delray Beach, Fla.

Focus on one card at a time and pay and or negotiate to get it paid down and paid off.

8. Forgiveness. If you accidentally make a late mortgage or other loan payment, ask the lender for forgiveness "just this once" according to certified financial planner John Davis, "It works."

Also, if you have lost a job, or whatever, ask your lender to put your payment on the tail end of the loan. Most lenders will do this, but it is a one-time thing, so, only use in an emergency. Remember, it is not a free ride. You are paying heavily in interest for this service, but it will help you from losing your home and damaging your credit score.

9. Divorce. If you are getting a divorce, be sure to contact creditors so you can replace joint credit cards and other loans in your name.

10. Never Max a Credit Card. Never ever reach the maximum limit on a credit card account. You pay excessively penalty fees and interest charges. Also, if you are using the card to survive, that is your sign something is wrong and you are headed for financial collapse.

"It is better spread the debt across several accounts," says certified financial planner Scott D. Cole.

A good rule of thumb is not to be above 80 percent of the actual credit limit.

"It is better to owe $5,000 on two cards each with a $5,000 limit than it is to owe $5,000 on one card with a $5,000 limit," Cole said.

11. Closing Lines of Credit. Never close the lines of credit that you use responsibly.

"Keep them open and maintain them for a long time, and your score will improve," says Scott Cole. "If your debt is high, however, you should consider closing unused credit lines. Close the account and get confirmation in writing that they are closed."

 

 

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