In reality, there is a lot more to a credit score than just "derogatory" items. (And there is a lot more to credit repair than just removing them.)
According to www.myfico.com, around 30% of your FICO score is made up of what we call credit utilization, or your "debt to credit ratio."
Believe it or not, it is often possible to get a significant bump in your credit score by doing nothing else but adjusting your debt to credit ratio.
There are two basic problems tied to credit utilization that could be affecting your score:
1. Too much credit available (this is rare).
2. Not enough credit available.
The more common scenario is #2, in which a person is using too much of their available credit.
For these people, they can often achieve a score increase by simply improving their debt to credit ratio.
This is normally done in one of two ways:
1. Paying off a certain (sometimes large) amount of debt in order to reduce the amount of credit you're using.
2. Opening up a new credit line to increase your amount of total available credit.
For most people, option 2 is easier to accomplish than option 1.
When you open a new credit lien, the "credit limit" of that line gets added to your total available credit.
Here's an example of how it works:
If you have one $10,000 credit card and your balance is $8,000, your debt to credit ratio is 80%. This means your credit utilization is HIGH and it could be hurting your score.
Let's say you open a new credit line in the amount of $10,000. Now you have 2 $10,000 credit lines, and your debt to credit ratio has gone from 80% to 40% overnight!
Suddenly, you're using a lot less of the credit that is available to you. You're debt to credit ratio (or credit utilization) has improved, which should result in a higher credit score.
For people with bad credit, getting approved for an extra $10,000 in credit might seem next to impossible.
The key is to look for the right kind of credit to apply for.
There are four basic kinds of credit that people with bad credit can usually get approved for:
1. Secured credit cards
2. Sub-prime merchandise cards
3. Sub-prime Visas or Mastercards
4. Store credit cards and credit lines
Of these choices, sub-prime merchandise cards and store credit cards are the best choices for improving your debt to credit ratio because they usually come with much higher credit lines than a secured credit card or sub-prime Visa or MasterCard.
And when you're trying to improve your debt to credit ratio, the size of the credit limit is important.
The other important thing to know is whether the card reports positive credit to the credit bureaus. In order to be useful, a card has to report to at least one of the three major credit bureaus. (It's best if it reports to all three, but a card that reports to at least one can still be used as a foot in the door to important pre-approved offers.)
In this article we've explained just one way that you can improve your credit score without actually disputing anything on your credit reports. There are more methods like this available, and those are covered in detail in the Credit Repair Intelligence System.