Here is a situation that is not uncommon these days :

An individual that has a couple of maxed out credit cards and a few collection accounts. The cumulative debt is not large enough to file bankruptcy. Bankruptcy should be the last option anyway. That basically is the story of his/her personal credit.

We all know that the collection accounts can be negotiated down if enough time has elapsed. Of course you still would have to come up with the money but it will be a lot less. In most cases you can also work out a payment plan.That leaves you with the maxed out credit on your credit report.

One good way to get positive credit history on your credit (that will result in increased credit score) is to get another credit card or loan. I think it is fair to say that in this economy it is tough to get much credit increase, even if you have decent credit. Years ago one could become an authorized user on someones credit card and add positive credit history, that would certainly help you in this situation. Only problem is that becoming an authorized user does not have the same effect on your credit like it used to. The other option is to borrow money from family or friends to pay off your debt. Mixing family with business is not always a good strategy.

There is another way. Public filings, especially in the form of UCC filings. Credit bureaus are connected to a public filing database that updates periodically (varies by state). They automatically receive all liens and bankruptcy information after it is filed at the county, state or federal level. You can actually file a certain document indicating that you have incurred a debt. Credit bureau will pick it up and as a result it will (one way or another) appear on your credit report. This is another way to add positive credit history. This results is your credit score increasing since a positive credit history appears on your report.

Please understand that this is a completely legal method and is very effective. Of course there is a certain amount of detail to it but at the end it is as simple as I make it sound.

Ever wonder how certain property managers and cars sales people mange to get liens on your credit. This is what they are really doing. A few of the more knowledgeable credit gurus file two or more of these public filings on their clients credit report to increase the credit score. Of course they charge enough money for it and never reveal what they are really doing.

The amazing thing is that even if you have filed bankruptcy you can use this method to quickly add lines on your credit report. Having two such lines on your report plus one secured cards (as an example) will quickly add positive credit history.

As a side note: Small amounts of credit is NOT that hard to get a little after filling bankruptcy. If you default on a debt, a collection agency can go after you for many years (depending on your state) . However, if you file bankruptcy most of the debt that falls under the bankruptcy can NOT be collected. Now, AFTER a bankruptcy you can not file for another bankruptcy for another 6 years or so. This gives lenders the satisfaction of knowing that if you default on their loan and you just filed bankruptcy they WILL be able to go after you for many years to come. As you might know that a judgment is likely to be filed against you and there is a chance that they will deduct your pay check or bank account. So getting some credit after filing bankruptcy is not that hard. Gentle readers there is always a come back.

Going back to public filings: In a nutshell this method that we are advocating eventually has the same effect (even if indirect) as getting a loan and gradually paying off the loan. We truly believe that this remains one of the best kept secrets of credit improvement.

Debt, good or bad (fortunately or unfortunately) is a VERY important part of modern everyday life. Either learn to use it or forever be a victim of it.

Public filings- UCC filings work both for personal and business credit.