My story was that I had a lot of outstanding medical bills and an old cable bill that I thought had been dealt with. I was in a good financial position after focusing on increasing my income for the past few years and so I paid off all of my outstanding bills.

It wasn’t until later that I realized that this had done little to improve my credit. Although, the bills were now appearing as paid on my credit reports there was still collection activity on my credit report which is an extremely negative thing to a lender.

Paid collections can stay on your credit file for 7 years and I really didn’t want to wait this long for my credit to improve. So I set about getting the collections removed from my credit file. The first thing I did was double check every collection listed on my report for inaccurate information. I then disputed anything inaccurate. The result was that the majority of the collections were removed from my credit report.

However a few paid medical bills and the paid cable bill wouldn’t budge. I then tried contacting the original creditors to ask for the collections to be removed from my credit file as an act of goodwill. Unfortunately, the original creditor for the medical bills had gone out of business so I struck out there.

I did however, contact the collection agency and asked them if they could remove them in goodwill. They agreed and after a few days all the medical collections were finally gone from my credit reports. That just left the paid cable bill.

This was the most difficult to get removed and it took some research and patience to yield a result. From reading on credit repair forums I knew I would have to contact someone high up in the cable company and plead my case of why I should get their good will. There were some mitigating circumstances why the original bill had been neglected and so I wrote an e-mail explaining the circumstances and asking for their goodwill in removing it from my credit file.

I then found e-mail addresses of several key people at the cable company. I sent the e-mail to all of them and this included the Vice President, Area Manager and Customer Care Manager. I got several responses but they all seemed to pass the buck rather than give me a yes or no answer. Finally, my request was forwarded to someone who would make the final decision. That decision was that they couldn’t remove the collection. I was disappointed and frustrated but I had to accept their decision. After all, the cable bill had been my responsibility and had remained unpaid due to my oversight even though there were some personal events that lead to this oversight.

I felt defeated but accepted that this could be on my credit file for the foreseeable future. After a day or so this got easier to accept and I started to think of other things to focus on with a view to improving my credit worthiness. Then out of the blue I got an e-mail from someone quite high up at the cable company. They said they were overriding the previous decision and that the paid collection would be removed within a few days.

I was ecstatic! After accepting defeat gracefully I was then rewarded with an act of goodwill from the cable company. It felt seriously good to have got the result I had wanted all along.

So my advice to anyone attempting to get paid collections removed is to be creative. Try disputing but only if there are inaccuracies. Then try the goodwill approach, first with the original creditor and then with the collection agency if you don’t succeed. If they say no, don’t get angry at them and be abusive because if you accept defeat gracefully they may just turn around and change their minds!

As you can see the largest overall factor in determining your credit score is your payment history followed closely by the amounts owed.

One thing that always seems to affect my credit is the length of credit history. Because I moved to the USA from another country my credit history is relatively short compared to that of most Americans the same age as me.

Here is another grahpic from Experian showing the “credit quality” of certain types of credit.

I currently don’t have a mortgage so that could be hurting my credit. I do have an auto loan though which is a type of installment loan. Obviously, I have some credit cards but also some retail cards like Walmart and Amazon.

Triple Advantage from Experian – Currently costs me $17.95 per month

Complete Premier from Equifax – Currently costs me $17.95 per month

TrueCredit from TransUnion – Currently costs me $19.95 per month

A lot of people think these services are a ripoff and they don’t even provide you with a proper FICO score. However, I enjoy keeping track of changes to my credit file and so for me it’s worth the monthly fee as I am always checking my credit file.

I have also previously used myFICO which is an excellent service (and website).

If you’re on a budget but want to improve your credit you don’t have to signup for all these services. You can usually get your credit report for free once a year from all three credit bureaus. Check out this website for your free yearly credit reports from Experian, Equifax and TransUnion.

Experian: 721
Equifax: 652
TransUnion: 756

I also have these recent FICO scores from applications and other sources.

Experian: 724 (from Bank of American denial January 18th 2012)
Equifax: 719 (from US Bank denial letter April 11th 2012)
TransUnion: 761 (from MyFico Febuary 2nd 2012)

I know it’s possible to dispute inquries but I don’t want to go that route since all the inquiries on my credit report are legitimate and made by me at one time or another. Inquiries are supposed to stay on your credit file for 2 years but lenders often only look at inquiries in the past 6 or 12 months.

One reason I have been denied credit recently is the amount of inquiries in the past 12 months. This is why I am taking a look at my inquiries to see if there is any way I can shift some of them.

The first inquiries I am going to attempt to remove are from Avis. I’ve been renting from Avis for some time and last year had quite a lot of rentals with them since I was without my own car for most of the year. One thing many people don’t realise about rental cars is that many rental companies will do a hard pull on your credit file when paying with a debit card.

I become a preferred member with Avis last year which apparently removes the need for them to run your credit every time you pay with a debit card. However, I still seem to have 4 hard pulls on my Equifax credit report from Avis.

So I got my wife to call Avis and ask if they would consider either removal or recoding of these. The lady she spoke to was very helpful and has already removed 3 of the 4 inquiries. If the 4th hasn’t gone in a few days we will call her back.

The credit score shown on my Equifax credit monitoring (although not a FICO score) has already gone from 644 to 652!

This may or may not work but it seems to have helped with Chase so I figure I would try it. applied online for their basic “MyAccess” checking account and was approved. I sent off a $100 deposit and should be getting my shiny new debit card in the mail shortly.

As with a lot of banks there are conditions to meet in order to avoid a monthly fee. This account requires either a $250 direct deposit each month or an average monthly balance of $1500 to waive the fee.

I’m working on the assumption that a direct deposit is simply any deposit not initiated from Bank of America. Therefore I should be able to move money around between my new checking accounts to avoid any fees. If that doesn’t work I may have to put $1500 in each account which will mean pulling cash from investments.

One of the reasons I am doing this is that I was recently approved for a Chase Freedom card which is supposed to be a difficult credit card to get.

I have had Chase checking and savings accounts ever since my Washington Mutual accounts were taken over by Chase back in 2008/2009.

US Bank recently denied an application for one of their credit cards so I really want to build a relationship with them. I plan on reapplying for their credit card in 6-12 months.

Anyway, I put in an online application for a Easy Checking account with US Bank. It wasn’t approved instantly which usually means there is a problem. It says I will get a decision within 3 business days so I will wait and post and update here.

UPDATE (25th April 2012):

Got an e-mail from US Bank today that states I was denied a checking account with them (click image to see full size).

According to the e-mail they pulled my TransUnion credit report which is weird because it’s not showing an inquiry from them. This was a checking account I really wanted so I am naturally dissapointed. This is the first checking account I have been denied ever!

I have a couple of options now. I can reapply online and change a few things on the application like the overdraft protection or I could go to an actual branch to try and open an account. I will think about this for a while before deciding my next move.

UPDATE (1st May 2012):

Okay, so I decided to actually go to a branch and open a a checking account since there is one not far from my house. The woman was really nice and actually convinced me to open a combined Silver Checking and Savings account. The bonus is that they waive the monthly fee since I setup a monthly transfer of $25 from Checking to Savings.

I’m not sure what the problem was opening an account online but they really seemed to like me at the local branch. I opened an account with no issues at all and got the impression they were impressed with my credit. Perhaps they treat all new customers in this way but I have to say I am liking the US Bank experience so far!

I’m not sure if this strategy will pay off but it seems to have helped with getting a Chase Freedom card so I guess time will tell.

Anyway, I got approved online right away and have sent a $100 deposit to open the account with.

One thing I will have to do is make a direct deposit of $500 or more per month to avoid having to pay a fee. It’s either that or keep an average balance of $1500 in the account.

The most important thing is the applicable interest rates of the airlines credit card that you want to apply for. Most airline cards have higher interest rates than ones without any type of rewards program. If you usually carry a balance on your credit card from one month to the next then an airline credit card may not be right for you. If you still wish to apply and gain the benefits that come with an airline card then you should be sure to choose one with the lowest interest rate.

Some airline cards offer you points for every dollar spent while others only give you points if you purchase at certain stores or make certain purchases. If you only get points for shopping at certain stores and they are not ones you normally use, then the card will be worthless to you. The same goes for which airline you normally use. Some airline cards are only for one airline, if you do not use that airline or seldom use it, then you will not be accumulating points that you can redeem and use.

There are also restrictions placed on airline cards, such as how many points you can receive in a year and many have expiration dates on the points earned. You could be saving up thousands of points and they may expire before you ever get to use them.

Now look at your overall purchases in one year that you place on your credit card. If you normally only spend $15,000 with your credit card but you need to spend $20,000 to receive a free trip with your earned points then the airline card will not be the one for you, unless you wish to spend thousands more to reap the rewards. Remember, bundled into paying off your debt you will also be paying higher finance charges and annual fees and you may never get that free trip.

If you travel quite a bit then airline cards are well worth your time to check into, however if you only travel a couple of times per year it may not be worth the higher interest rates, higher finance charges and annual fees that come along with an airlines credit card. Some companies offer extra incentives such as a free companion ticket, but if you normally travel by yourself then this offer is one you will not need.

There are some airline credit cards than in some cases will allow you an upgrade if you travel a lot. This can give you the luxury of first class but you may find out that you will receive more points with an airlines credit card that does not give upgrades.

The credit report is extremely important, especially when it comes to credit cards. Banks and lenders use your credit report to determine if you meet their criteria for a credit card or a loan. Your credit report is the determining factor for your credit, which is why you should never let your credit cards do any type of damage to your report. To avoid this, simply pay your bill on time.

Most people will use their credit cards responsibly and won’t damage their credit report. Doing this will show lenders that you are responsible, and that they can trust you with loans and credit – which in turn will raise your credit score. Keep in mind however; if you have a lot of open accounts, it may tell lenders that you have a lot open and that you won’t be able to pay them back. Although this may count as good credit, lenders look at several open accounts as being potentially damaging to your credit report.

Although you may be tempted to have more than one credit card, it can actually be a downfall in the eyes of the lender. Most lenders will see this as you having a way to spend all of your limit, and will fear that you may do so. Even though you may not have this intention, credit card lenders will almost always fear the worst case scenario, and it eventually lead to you damaging your credit score – simply because a lender will turn you down for a future offer you apply for.

Something else you need to keep in mind is the fact that it can be really easy to miss a payment on your credit cards. Although this doesn’t sound bad, it can have a very negative look on your credit report. If you start missing payments or paying them late, the lender will eventually enter it in your credit report. This can have a negative impact, lowering your beacon score and eventually bringing down your overall credit rating.

If you play it safe and only get one or two credit cards and keep a track of how you use them, you won’t need to worry. Your credit report should always be a primary concern, and you should always do your best to ensure that it stays free of negative ratings. If you keep up things up to date – you’ll enjoy the benefit of a positive credit report.