How to Fix or Improve Your Credit Properly

Hi folks! It’s almost autumn and a great time for self improvement.

Here is exactly how to pay a debt to a collection agency or directly to a creditor AND ensure your credit reports not only reflect the payment in full or settlement in full immediately, but also improves your credit score:

  1. Obtain your free Equifax credit report by mail in 5 days by calling 1-800-465-7166. Your address on file with Equifax needs to be up to date to do this. If it’s not, use this form to update and you’ll also receive your free credit report by mail in 5 days. Don’t bother paying for your beacon score
  2. Notice any debt which is overdue is reported in two spots, the Public Record section where collection and legal notices are reported, each with their own unique reference number AND in the tradeline section where, for security, only the last few digits of the account number are reflected.
  3. Contact the agent if there is one, otherwise contact the creditor directly and, unless you already have this, request they EMAIL you a balance letter with BOTH THE ORIGINAL ACCOUNT NUMBER AND THE AGENCY REFERENCE NUMBER ON IT as well as payment instructions. When the notice is received, compare the account and reference number to your credit report. They MUST match
  4. This is when you may choose to offer a lump sum settlement of less than the actual balance to retire the debt. Alternately, if you don’t have a lump sum available, offer a payment schedule you can stick to. Pay in a way that ensures you receive a receipt immediately such as direct deposit, online banking or email money transfer
  5. When the agreed balance is fully paid, request a Release Letter confirming zero balance, no further liability and including the exact same account and reference info as the original demand letter. If the Release Letter shows up without the correct account/reference details, send them a copy of the first letter and politely demand the new letter has matching details
  6. Remember that address update form from step 1? You now use the same form to update both credit bureaus that your debt has been “released”. You will receive a new copy of your credit report proving the paid debts are no longer reflected as over due in both the Public Record section AND the Tradeline sections of your credit report.


If a debt was 180 days over due or less when it was brought to zero balance it will resolve to R1/I1 meaning good debt, if it was more than 180 days over due when the last payment was posted, it will show as R9/I9 “Paid in Full” BUT THE TRADELINE AND UPDATED PUBLIC RECORD WILL NO LONGER BE FACTORED INTO YOUR BEACON SCORE.

As long as you do all of this and use/pay on time any credit reporting account, such as a secured credit card, you will see major credit improvement over the next 6 to 12 months and at 24 months many people are able to be qualified by their bank for an unsecured credit card, personal loan or mortgage.

I have done this many, many times for my clients and, as long as you do it exactly as described here, it works perfectly every time.

You can reach out to me any time for help with this including how to put together money for offering lump sum settlements and I’d be happy to help out.