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your indebtedness faster as time goes by.

Arrange to make the minimum monthly payments for all your credit cards and finance loans except for the one that charges the highest interest rate. Set up as large a monthly payment to the high-rate account as you can. Include the "credit repair" portion of your budget in this payment. If two or more accounts are tied for the highest interest rate, focus on the smallest balance first.

When the account is paid off, reward yourself. Move 20-25% of that payment into your monthly budget. The rest of the payment should now be applied to the card/loan with the next highest interest rate, in addition to the minimum that you were already paying. When that account is paid off, move on to the next one.

It is not always good to close out a credit card account once it is paid off. If you have five or more credit cards, go ahead and close out the ones with $0 balances. Otherwise, leave them open. Those accounts help you establish credit history and they reduce your percentage of credit utilized.

The credit repair process will likely take years to complete. However, your credit score will be improving the entire time as long as you continue to make payments on time and you don't acquire any new debt.

For more information, refer to the Federal Trade Commission's web site on credit and loans . From the FTC web site, you can find a great deal of helpful information, including information on free credit reports, the Fair Credit Reporting Act, and a booklet entitled "Building a Better Credit Report", a how-to guide on credit repair.

Learn more about this author, Louis Georges.
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