There is several ways and variables that play into an individual score make it impossible to say that one particular action will increase a given score by a certain number of points. Sometimes, I have great results when a borrower pays down a credit card or pays off a collection; other times, it makes very little difference. But there are at least some good guidelines to try and follow.
Here are some tips I’ve picked up along the way:
1. The fastest way to a great score is pay your bills on time, keep account balances low, and take out new credit only when you need it. This is mainly about plain old common sense. People who do these things faithfully usually have very high scores. To lenders, high scores signify that you’re being conservative and cautious about credit. In turn, they see you as a lower risk borrower and will reward you with much better terms and a much lower interest rate.
2. What if you’re house hunting and you just need a few extra points to bump you over the line to the great rates? Start by having your mortgage broker, pull your credit report and your credit score to see where you are. If your score is above a 720, you’re golden. Even 700 is going to get you good terms. Improving your score from, say, a 720 to a 740 won’t get you better terms, though, so don’t waste your time doing that. Just continue to follow the guidelines above. What you’re really looking for on your report are factors that could be negatively affecting your score. Look for errors in the report, such as accounts that aren’t yours, late payments that were actually paid on time, debts you paid off that are shown as outstanding, or old debts that shouldn’t be reported any longer (negatives are supposed to be deleted after seven years, with the exception of bankruptcies, which can stay for as long as 10 years). Every time I meet with a client, I go over their report with them to ensure that the information is correct. I can’t tell you how many times there has been old or downright incorrect information in the report! 75% of credit reports contain errors. Hmmmm!!
While repairing errors, the fastest route to a better score is paying down balances on credit cards; in my experience, it’s possible to increase your score up to 200 points or more in 90 days by paying down your credit lines because it helps your debt to credit ratio. 30% of your scores are calculated by how well you manage that area. If you can’t pay them down then you must apply for new credit to offset your debt to credit ratio. What that means is that, the credit scoring system looks at all your credit card limits and your credit card balances and calculates what your credit limit vs. what your balances and shoots out a percentage. So for example, If you have a credit card limits that amount to $10000 and you owe $8000 on them, you are at 80% of the credit limits. Your debt to credit ratio in that case is at 80%. Typically you want to be at 30% or less. If you would like to apply for high credit limits to help your debt to credit ratios visit www.ePublishingUSA.com . They approve anyone with a heartbeat. Let all your friends and family know so you can help them with their credit. From now on, do your best to pay your bills on time (or ahead of time) and keep your balances as low as possible. After 12 monthsthe scoring module becomes immune to that late and your credit scores are not affected.
3. One thing you shouldn’t do if you’re just trying to boost your score is close unused accounts. If someone tells you to close unused accounts to improve your score, don’t listen. It won’t help you and it can hurt you. Closing unused accounts without paying down your debt changes your utilization ratio, which is the amount of your total debt divided by your total available credit. You appear closer to maxing out your accounts. That’s why your score can drop. It doesn’t mean people shouldn’t close them, but don’t close them to improve your score. If you do cut up cards, though, leave the oldest one open! The length of your credit history is another factor in your score. If you close the account of the credit card you got when you were a freshman in college and leave open the ones you just got within the last couple years, it makes you look like a much newer borrower.
Bottom line: know that you’re not powerless when it comes to your credit score. There are a lot of things you can do to improve your score and you need to understand what your credit is like now and what’s influencing your score today. Then you can go out and get that amazing interest rate!
Getting back on track after you’ve had a financial shock can be very difficult indeed; banks will turn you away and getting a credit card is almost impossible, so it can be extremely disheartening if all you want to do is start afresh. The primary reason people get turned away from credit is because their credit rating is poor. This could be for a number of reasons, and the only way you can really know what they are is to look through your file to find them. There are a number of things that you can do to try and bring your credit score back up to a respectable standard.
If you’ve still got old credit cards lying around that are still open, you’ll want to make sure they’ve been cancelled before you apply for new credit accounts. This is because the open credit card accounts will show up as available credit, and will reduce the amount of credit open to you from other lenders.
Make sure you pay back your credit card every month, without delay. Even small issues can set your credit rating back months or even years. Make sure you are at least up to date with the minimum repayment schedule, so that there aren’t any problems at all. However, it is best to try and pay back as much of the debt as possible, so if you’ve got any savings, use them to pay off debt early while you can.
Don’t keep applying for credit once you’ve been rejected once. Every time a lender checks through your credit file, a note will be left on your report. If checks are being made all the time, there will be numerous notes left and this will damage your credit report.
Talk to your lender; this may sound obvious, but far too many people simply try to avoid talking to their lender in any way possible. The fact is, if you can’t pay off your credit card debt, the best thing to do is to go and talk to someone who may be able to arrange a new payment structure with you. This may damage your credit rating slightly, but will be much better than going into further debt and potentially getting a county court judgement (CCJ).
Apply for an expensive (high interest) credit card, and make small payments onto it. Don’t use it too much and don’t rely on it as your sole source of spending power. Consistently paying it back and avoiding the high interest rates will allow your credit rating to improve rapidly.
Check your credit report for any errors that may have occurred; these can be things like old contracts for mobile phones that were assigned to a different address. Some of these errors are unbelievably easy to solve, so checking your credit report is one of the first things you should do once you’ve been rejected.
Clearly, there are dozens of different ways to improve your credit rating, but those listed above will help you greatly in the short term.
UK Credit Secrets, the best-selling UK credit repair publication is helping thousands affected by the economic downturn rebuild their credit rating in as little as 30-days without the help of outside agencies and credit repair companies, to enable even those with bad credit rating get their finances back on track. Offering guaranteed car finance, guaranteed bank accounts, credit cards to help build up credit ratings and other poor credit financial products.
Article Source: http://EzineArticles.com/?expert=Iain_Stubley
Bad credit can happen to good people. Often all it takes is a financial misstep here or medical emergency there and the average American could easily make a late payment, miss a payment, or fall behind all together on their bills. While there is usually a unique personal story, and often a very good reason, rarely are individual circumstances a factor when your credit score is calculated.
Now more than ever it’s important for individuals to know their credit scores; but apparently private citizens aren’t the only ones who need to know the three digit score that’s become the “grade” you’re given based on your on-going financial behavior.
Recently a very gutsy newspaper in Toledo, Ohio challenged both Republican and Democrat City Counsel candidates to “show their cards,” by giving access to their credit reports and credit scores for the voting public to see.
This raises a very interesting question; would an elected official’s credit score affect your vote?
I began to think about the potential precedent that this challenge would set if all political candidates were asked to “come clean” with this information. Sure we’re used to seeing their tax returns and knowing how much they make, but somehow this seems different, bigger, and more profound.
Credit scores are used by several groups to determine financial patterns, habits and in some cases even your character. They’re also used to predict the likelihood of your repeating these patterns in the future.
In general credit scores range from 300 (low) to 850 (very high) and everywhere in between. There is still some mystery around how a score is calculated and what factors are involved. One thing is for sure, this is a number you need to know and watch. Everyone from your current creditors to your car insurance company are checking it periodically to see where you “rank,” a low score could result in rate increases.
It’s obvious that as individuals we’re “deemed worthy” (creditworthy that is) by our credit score on a regular bases. Should the same standards be applied to those we choose to run our cities, states and even this country?
To get a broader perspective on this Pandora’s boxlike question I did a bit of research on the overall impact of credit reports and credit scores on an individuals life and came to learn that, according to a Federal Trade Commission Consumer Alert, “Employers often use a credit report when they hire and evaluate employees for promotion, reassignment or retention.”
While to some it might seem unfair or like “big brother” is watching just a little to close, often this practice is widely justified, especially in the wake of Enron, corporate scandals and 9-11. Employers are learning that they can tell a lot about a job candidate and their probability to be a quality employee by their credit report and credit score.
Credit scores have the power to be the Varsity letter you wear proudly on your jacket or the Scarlet Letter you wear shamefully on your chest. Given the weight it has on so many aspects of an individuals life, is it fair or even necessary to require political candidates to disclose theirs?
The question will no doubt be debated at water coolers, and in bars, dining rooms, even campaign war rooms all throughout the city of Toledo. I’m in New Jersey (where several candidates are running in heated battles as I write this) and I’ll be just as intrigued to learn if this fizzles out, or catches fire as a new trend.
It appears to me that the real question voters in Toledo (and soon maybe everywhere) have to ask themselves will be, “Is a credit score (determined by a complex formula that no one seems to quite understand and that doesn’t take individual circumstances into consideration) really a good barometer for a political candidates ability to lead or do the job?”
Maybe. Maybe not. But before you form your opinion, I invite you to ask yourself a question. Given your personal financial situation, past or present, how many votes would be cast in your favor if your credit report was used to judge your character or ability to do the job?
About the Author
Sanyika Calloway Boyce has made her share of money mistakes. She now teaches financial literacy programs for teens, college student and adults. Visit her online at www.financialfitnesscoach.com To find out what your credit score says about you go towww.financialfitnesscoach.com/creditreport
Article source:
Would An Elected Official’s Credit Score Affect Your Vote?
There are literally hundreds of credit repair websites and a lot of them try to guarantee success but the reality is most of them are just a waste of money. They use methods of repairing your credit you can do yourself if you simply google credit repair templates. Their process is very lengthy and requires months and even years to get a lot of things removed and sometimes the bad marks can come back as some companies are very persistent, especially if you still owe them money.
The only guaranteed method to repair your credit is to pay off the old bills and get your derogatory balances to $0. “Well that isn’t very helpful” is probably what you are saying. Since none of us just have cash laying around to do that there are other things you can do that are guaranteed to increase your FICO score practically overnight and start rebuilding your credit.
It’s actually very simple. Sign up for Millennium Secured Credit Card and send them $300. Buy $90 worth of groceries on it and make the payments. Keep the balance under $90. Then sign up for www.alliedtrustdiamond.com and get a $10,000 unsecured credit card, buy something and make the payments. Do a google search for USA Shopping Club and sign up with them for $12,500 unsecured credit card buy something and make the payments, Eclub USA and get your $3,500 credit card and finally Horizon Gold and get your $500 credit card.
Once all of these companies report to the credit bureaus you are going to see an immediate increase in your FICO score. Guaranteed. Then you can work on getting the bad marks paid off and removed. It’s much easier to get them permanently deleted if you don’t owe them any more money.
By: credit repair
About the Author:
Are you planning to make an effort at credit repair? Make sure to do it right. An informed effort will produce amazing results, and subtle details can make a world of difference. Take a bit of time to plan your attack and you will prevail. Here are my five favorite credit repair tactics proven to produce solid and significant results.
1. Don’t Wait to Rebuild Your Credit
If a stretch of hard times have left you with no open accounts it is tempting to postpone rebuilding credit until your credit repair project has borne fruit. You may think that if you wait until your credit is clean you are less likely to get denied. Unfortunately, the logic is flawed. Your credit scores will not recover if you don’t have active accounts. And new credit takes time to yield positive credit score results. If you put off opening new accounts you will be disappointed with your credit repair project. Now is the time to start rebuilding. Open two secured credit cards. Do it today. Once you receive them, use them, and keep them active. But be careful to manage the balances properly.
2. Manage Your Revolving Balances
The FICO scoring model places great weight on the relationship between your credit card balances and your card limits. This factor receives extra weight on accounts that are less than a year old. So if you have recently opened new secured credit cards as part of your credit repair strategy this issue is extra important. Your credit score will be rewarded if you keep your balance low, and conversely you will be punished if your balance drifts upward. Optimize your credit score by keeping your balances under 20 percent of the cards total limit. For example, if you have a three hundred dollar limit, keep the balance below sixty dollars.
3. Dispute Intelligently
If you are going to manage your own disputes instead of hiring one of the available credit repair services there are some caveats. Keep your disputes simple. The credit bureaus do not want to hear your story. Limit your communication to the bare minimum. If you have found an account on your report that does not belong to you, just list the account and say that the account is not yours. One more strategic pointer; don’t give up. If you do not get the response you want the first time, dispute again. This time state clearly that you are not happy with the first results and you demand that they have the creditor research the account. Stand your ground.
4. Learn Your Reporting Period Limits
When you review your credit reports and are planning your credit repair effort you must examine the reporting dates. Derogatory information, in general, can report for seven years. But there are exceptions and specific ways of counting the dates. Understanding the rules will give you the edge you need to succeed. Many people are not aware that the reporting period clock starts ticking on the date of the original default with the original creditor. Reporting periods never start with the reporting date of subsequent collectors. There are many cases where you will need to calculate your dates very carefully. Take nothing for granted.
5. Challenge Collectors
The most egregious offenders of credit reporting rules are collectors. You must examine all collection accounts as part of your credit repair effort. Don’t believe your eyes. This is a case where skepticism will pay dividends. Collectors buy and sell debt on a regular basis. Did you know that if a collector sells a debt to another collector or returns the account to the original creditor they are supposed to withdraw the account from your credit report? In fact, this rarely happens and non-compliant collections linger on your report for years depressing your scores needlessly.
And When in Doubt
If you are too busy to give your credit repair effort the careful attention that it deserves, just reach out for help. There are many legitimate credit repair services that will insure that every possible method of improving your credit is explored and implemented. Credit repair is a detail business, but you don’t need to be intimidated. Whichever route you take help is nearby if you need it. Good luck!
Copyright © 2009 Ian Webber. All Content. All Rights Reserved.
By: Ian Webber
About the Author:
Ian Webber is an expert in consumer law and credit repair. Ian is a graduate of the London School of Economics and The University of Chicago where he earned his LLM. Ian consults with one of the leading online credit repair services and is currently based in Florida.
