The basic thing to know in the process of repairing your credit rapidly is that whenever you make a purchase through a credit company or take a loan in any form, the facilitator (creditor) makes a report to a bureau or an agency about your in time or not in time payments.
These reports affect your credit ratings.
The bureau or the agency compiles these reports into a consolidated report called credit report which describes your credit rating.
This credit rating is represented in form of a three digit number from 300 to 850 being the perfect score.
Any kinds of negative markings will keep you from having a better score and eventually any loans on good rates.
These negative ratings stay there for 7 good years before they lose their important in terms of credit ratings given that your conduct with creditors continue to stay good in those 7 years.
When you start to miss your payments, the creditor will try their level best and go through a process in attempt to receive payments.
They warn you in the beginning and after a long period of lapse of payments they sell your account to a collections company at a lower rate than the amount you owe to the credit company.
The loan type may be of credit card type or the financing type.
By selling your account to the collections company the creditor actually write off your loan from their main account.
This thing leaves a negative mark on your credit report.
When the credit company decides to write off your account they actually do it after understanding it completely that chances of your paying the amount and their recovery are minimum enough that it will be a viable solution for them to sell your account at the half amount so that they can stop pursuing you and leave it up to the collections agency.
When this happens, the creditor informs the credit bureau or the agency and you are left with a mark on your credit report which stays there for 7 years and in case of bankruptcy 10 years.
This thing leaves a negative mark on your credit report and paralyze you from instant credit repair efforts you put in to get your credit score better.
A very important action you can take for rapid credit repair is to start paying your debt to the creditor even when contacted by the collection agency.
You can directly contact your credit company and immediately negotiate a way out to start paying the debt to them.
If negotiations go good with them, the credit company will remove the 'gone to collection' tag from your credit rating which will eventually show in your credit report.
This is going to give you a boost in your rapid credit repair efforts.
At all your negotiations with the credit company do not succeed, you will have to make a way out with the collection agency.
You need to keep one thing in mind that the negative mark on your credit rating is going to be there and it can't get any worse than that so you can have your time in thinking your options.
One thing to consider here is that the collections agency most probably have bought your case in half the amount you owed to the credit company and anything more than that will be a profit for them.
The collection agents usually come very aggressive and demand a full payment right away otherwise they will threat to take you to the court but when you deal cool and negotiate well, you can get your file closed in just more than half the amount you owed to the credit company.
The collections agents get motivated when you offer them more than half the amount right away to avoid dragging the process.