Your credit rating is more important in 2010 than any other year in the history of America. There is less available credit than any other time in recent history. Credit card companies launched a massive wave of cut backs. You may have noticed your available balance was slashed overnight.

You may have noticed that it is getting harder and harder to be approved for a mortgage. The minimum FICO score necessary to be approved for a home loan has increased by 40 points. Additionally, the minimum score needed to obtain reasonable rates is up by 28 points.

If your credit score is less than stellar, obtaining new credit in 2010 will prove to be almost impossible.

What you will need this year is a proven strategy for boosting your credit score.

Last weekend, I decided to commit my 2010 financial goals to paper. So, I sat down and did so. I even inlcuded my desire to reach a FICO score of 775.

I hope that you have decided on some financial goals for yourself. Once you have made a list of goals, you will need a plan for obtaining success. Erasing negative items from your credit report and improving your FICO score should be included in your overall strategy. A formula for achieving these goals follows:

Credit Strategy #1: Work on Removing Negative Items From Your Credit History

You should at once dispute any questionable negative item such as a collection, late payment, charge off, repossession, and/or bankruptcy in order to remove it from your credit report.

To accomplish this, you can use the dispute form letter which you will find here.

Often some items can be quite stubborn. Charge offs, judgments, and repossession are especially “sticky”. You may need to get more aggressive than just a standard dispute letter.

Something you might try is called “debt validation.” This is where you demand that your debt be validated by the original creditor. (This is substantially different from disputing an item with the bureaus. However, it is often very effective when dealing with collections and charge offs.)

It is probably best not to attempt debt validation on your own. I tried to do it myself and failed miserably. In fact, I did such a poor job that the creditors just ignored my correspondence altogether.

However, I went to Lexington Law and then it was a different story. I was so relieved when Lexington Law was able to get Midland Credit, a big bad collection agency, to notify the credit bureaus and instruct them to remove all of my charge offs and collections.

You may not want to get a firm like Lexington Law involved. This approach is for people who are seriously dedicated to repairing their credit. If this is you, you can contact Lexington Law at (800) 636-3158 and speak to one of their paralegals for a free consultation.

Credit Strategy #2: Move Forward with Building Good Credit

Hopefully, you already have an unsecured account. If so, be sure to pay the bill on time each and every month. Establishing an automatic payment would be best. This way you never miss a payment and the bill is paid on time every month. And, saving money by not having to pay the cost of postage is an added bonus!

The bad news is for people who don’t already have an unsecured account – like a Visa/MasterCard account. It is tough to even get a card if your score is in the 500 range.

Credit Strategy #3: Don’t Get Discouraged or Let Down Your Guard

Don’t lose sight of your goal and what you want to accomplish. Rebuilding your credit will take time. The sooner you get started the better. It is wise to keep track of your credit score by maintaining a detailed log. Begin your log by noting your credit score as of today’s date and tracking it as you rebuild good credit and as questionable negative items are removed. If you are successful with your goals, your credit score should increase each month.

If things don’t go the way you think they should, don’t become discouraged. There are normally additional tactics which can be used to get something done.

Discover how I raised my credit score from 582 to 745 in four months with the help of Lexington Law. Learn the truth about quickly and effectively deleting bad credit at www.creditforcouples.com.

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Understanding how to settle a debt with a collection agency is very important. Understanding this process can save you a lot of money and help you to repair your credit to boot.

If you find yourself in an increasingly tough financial situation, it is best to contact the creditor. Attempt to arrange a payment plan with them before things proceed further.

Being unable to arrange a payment plan with your creditor will ultimately cause increased anxiety as a collection agency will probably be assigned your debt. In addition to this, your credit score will spiral downward. It will be extremely helpful at this point if you understand the process of debt settlement.

It is important to know and understand that the collection agency probably purchased your debt at just a few cents on the dollar. Most often, collection agencies purchase debt at 8 cents to 12 cents on the dollar, so a debt of $500 might be purchased for as little as $40 or a debt of $6,000 may be purchased for as little as $480.

In spite of this, settling for a small amount will not be the collection agency’s idea. Getting as much as they can from you is, after all, how they make money. In order to scare you into agreeing to pay the full amount and quickly, they may even threaten a legal suit.

Collection agencies, however, are hesitant to actually launch a law suit for what amounts to a very small amount of money to them. A law suit represents energy, time, and money so a collection agency will normally stop short of this recourse. This does not mean that you should ignore any communication they attempt to have with you. It is best to attempt to settle the account.

Collection agencies like lump sum payments so, if you have the funds, make an offer. A good beginning offer to the negotiation would be to settle the debt in full for twenty-five percent (25%) of the original amount owed. Then, you should wait for a response from the collection agency. It may come back with a counteroffer. The process may continue this way until an agreement is reached. It is vitally important that you keep copies of all documentation to and from the collection agency. Be sure to obtain the final agreement in writing.

Negotiating a payment plan with the collection agency is the next option if you don’t have cash on hand for a lump sum payment. A law suit is unlikely if the collection agency feels you are trying.

One thing you want to make sure of is that your debt will be “deleted in its entirety” from your credit history, whether you are paying a lump sum or are going to make payments. If you do not obtain this assurance “in writing” from the credit agency, this black mark may remain on your credit report for up to seven years.

To summarize, approach the collection agency confidently and make an offer. Do not allow bullying to sway you, stand firm. However, you must keep in mind that you do owe this debt and collection agencies earn their bread and butter by collecting debt. In light of this, try to be fair when negotiating, but obtain the best rate possible. Additionally, do not ignore any communication you may receive from a collection agency. If you follow the recommendations in this article, you may be able to clear up that outstanding debt.

Learn How to Stop NCO in its Tracks. Free Tips to Escape Debt in Less than Seven Days.

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