Looking for ways to repair credit

[Mindy Jensen]

What is your favorite way to repair credit? Have you used a certain strategy that worked really well/increased your score significantly?

I'm not looking for the credit repair equivalent of a get rich quick scheme. I'm fine with something that takes a while. I am writing about repairing your credit, and want to make recommendations that work.

[Scott Trench]

@Bill Hamilton

You're right of course that there is a strategy involved in paying down newer debts  first because they affect your score more than old debt. Thank you for bringing that point up and adding to my comment - we always make sure to mention that when we are going more in depth with folks we work with. For some reason I just trailed off after "even if it's just...". Not sure what happened there but my mind must have wandered, so thanks for the follow up there.

Credit repair can either be mind numbingly simple, or thoroughly complex (science, or art as you describe). You can either look at it as:

"I need to be as strategic as possible with every single payment I make to maximize the rapid increase of my score by playing with a complex set of rules" 

OR

"I need to pay off my debts and build a strong financial foundation." 

The first mindset is dangerous, in my opinion, and does not solve the root of the problem with these folks in most cases. We prefer mindset number two - start today and get your mind right. Mindset number two allows for mistakes, and works towards a long-term financial foundation. 

One of the other things you mention here is that people with bad credit need to "work with a professional". Personally, I've become frustrated with this statement. Where's the "professional" at the homeless shelters or churches that I volunteer at? Not with us, that's for sure. They're stuck with me. I hope I'm better than nothing, though we do always provide documentation with professional contact info on it. Sure, the professional might help them play the game more strategically, but the reality is such that a lot of the folks we work with have bad financial habits and don't prioritize simply paying off debt, which are far more impactful to their score over the years than their ability to manipulate the system.