One of my companies is getting ready to make a big push at expanding nationwide. In order to finance this, I will once again be applying for a business loan. Because of my efforts at credit repair over the past few years, I am now in the top tier of credit scores, and I expect to be approved easily at a low interest rate.

I thought I would take this opportunity to reflect on the past 5 years of credit repair for myself, my friends, and my clients. And really, when I say “credit repair,” I mean the entire process of climbing up the credit ladder from the worst possible situation (my scores were 500 at Experian, 463 at Equifax, and 466 at TransUnion), getting negative entries removed from my credit report, getting a credit card again, getting an installment loan, being diligent and disciplined about those loans, building positive credit, and eventually arriving at the top tier (760-850 range; any score in this range will get you the lowest interest rates).

I have succeeded at repairing my credit and climbing to the highest rung of the credit ladder, where I have the possibility of using my excellent credit to build my businesses and buy real estate, thereby growing lasting wealth for my family for years–even generations–to come.

I’ve also helped other people do the same. I’ve met with a lot of people at a financial low point in their lives. And while I’d like to say that every single one of them has followed my example and made a complete turnaround, that’s not the case. Some have listened to me and read about my system, but after experiencing an initial surge of inspiration and enthusiasm, fallen back into their old habits of missing payments, and soon it’s as if they had never even attempted credit repair. It’s like ballooning back up to your old weight after losing a few pounds on a crash diet.

So I’ve been reflecting back on the past 5 years with the goal of committing to paper exactly what separates the winners from the losers. Above all else, I’m convinced that it is a few character traits, and not any specific nitty-gritty tactic like how you word your dispute letters to the credit bureaus.

Here’s what I’ve learned:

• Persistence + Discipline = Success. In a universe without many magic formulas, this one stands out as a fool-proof way to achieve goals. Consistent effort over time yields results. Persistence means continuing to tackle those actions you know you need to do: sending dispute letters every month until the items are removed, paying your credit cards on time and in full, applying for new credit when you should, asking for credit limit increases every 3 months, and so on. A common thread I see among people who fail to improve their credit is that they send in 1 dispute letter, get shot down, and then stop trying. Newsflash: for many people, it takes more than 1 letter. Deal with it. Discipline means forming habits out of the individual actions that it takes to repair your credit. If you do simple things like setting reminders on your phone when it’s time to send a new dispute letter, and then actually do it when that alarm goes off, your efforts will pay off in time. Success is the accumulation of small individual actions; by disciplining yourself to do those actions regularly and on time, you will succeed. It’s a long game, so keep plugging away. Those who do always win.
• Repeat after me: “your mileage may vary.” This is an expression I’ve heard countless times in the context of credit repair. People want certainty about the effects various scenarios will have on their credit scores. They ask questions like “If I get this charge-off removed, will it be enough to raise my score 37 points so I can get into the next tier of credit scores?” or “If I send a 623 letter to the original creditor and word it this way, will it get that entry removed from my credit reports?” Predicting specific outcomes from individual actions related to your credit score is extremely difficult, if not impossible. First of all, the actual FICO score is a proprietary model that is considered a trade secret under US intellectual property law. Nobody outside that company knows exactly how it works, and nobody has perfectly reverse-engineered it. Secondly, the internal workings of all the credit bureaus and creditors are opaque and difficult to understand. Their policies and procedures are what they are, and whether or not an account gets removed from your credit report on any given day could boil down to the mood of someone at the home office. When I was repairing my own credit, I was often frustrated by watching someone else have great success with a certain tactic, only to try it myself and fail. Other times, negative accounts would mysteriously fall off my credit report when I hadn’t done anything. Even if we had perfect information, not everything works for everybody–and we surely do not have perfect information. You could drive yourself crazy if you let yourself, trying to figure out what’s going on in the minds (and computers) of those who have control over what shows up on your credit reports. Just accept that the lines between cause and effect don’t always make sense in the short term. Over the long run is a different story (see the bullet point above). There is no magical way to word a dispute letter. Don’t invest any energy into tweaking the basic principles of credit repair. Your energies are better spent mastering the basics and applying them with persistence and discipline.
• Don’t make stupid mistakes. Good credit, like trust, is gained in inches and lost in miles. A single missed payment can undo years of on-time payments. This lesson is especially important as you move into the building-good-credit phase of credit repair. When you first get a couple of negative entries removed from your reports and you see your score climb, it can be tempting to jump back in and take out a bunch of credit cards. If you do that, and then start accumulating debt again, you’re going to be right back where you started. You’re supposed to climb up the credit ladder, not fall down from it. You need to have the humility and patience to go slowly as you rebuild your credit, opening no more than 1 credit card every year, and paying it off in full every month. Once you get in the habit of doing this, you can take out an installment loan–if it makes sense to do so. Don’t go out and buy a car just to improve your credit. Never accept larger loan payments than you can afford comfortably. When it comes to adding new credit, it’s better to go slowly and adjust to the new responsibility than to go too quickly and end up with missed payments, charge-offs, repossessions, bankruptcies, and foreclosures.

These things speak to the kind of mindset you need to have, the kind of character you need to develop, in order to master good credit. Turn them over in your head, spend time thinking about them, and they will inform you as you take specific actions to move up the credit ladder.