Archives for "Credit Cards"
Credit Repair Efforts That Count
Opening Fresh Revolving Accounts
One of the most effective credit repair strategies for anyone that has been through a period of bad credit is opening fresh revolving accounts. Nothing can rocket your scores upward, faster and farther, than a couple of new credit cards. Why does this work so well? It seems that FICO is ready and willing to reward those who prove that they are capable of a successful reentry into the world of credit. Of course you need to manage those new accounts properly.
Managing Your Balance to Limit Ratios
Once you have your new accounts open you must resolve to manage them in a meticulous manner. And this involves more than just making your payments on time, although that too is critical. As urgent is the way you manage your balance to limit ratio. This is the relationship between your balance and your account limit as they are reported to the credit bureaus. For credit repair purposes you should try to keep use less than 20 percent of the available limit.
Becoming an Authorized User
Another phenomenal credit repair technique that is capable of producing dramatic credit score improvement is the tried and true method of becoming an authorized user on a credit card that belongs to a friend or family member that has excellent credit. The key to success, and the factor that will determine how much of a score boost you get, lies in three criteria: the age of the donor account, the payment history, and the way that the donor manages their balance. The best accounts will be older that three years, have never had a late payment, and has a consistently low balance.
Stomping Out Bogus Collections
A phenomenon that has grown into a virtual plague in recent years, and one that can be effectively contained by credit repair, is the prevalence of inaccurate collection accounts. These accounts may include debts that were previously paid or settled but have somehow come back to life and often referred to as zombie debt or zombie collections, debts that belong to another person, and even those resulting from identity theft. These can be challenged and removed through credit bureau disputes and debt validation under the FDCPA.
Scrubbing Errors
And let us not forget the most traditional, reliable, crowd-pleasing mainstay of credit repair, the credit report clean up. This amounts to sending letters to the credit bureaus to challenge all of the derogatory information that you believe to be inaccurate. Credit reporting errors are massively common, and for many people a few months of disputes can cause a near complete credit report transformation. Patience may be called for, as the bureaus can be stubborn and may put up unfounded resistance, but stand your ground, repeat your efforts as needed and you will amazed at the results.
Consulting an Expert
When it comes right down to it, you may be best off hiring a credit repair service to guide you through the credit maze, and to manage the more mundane day-to-day tasks involved in the process, like sending and resending the dispute letters to the bureaus. Credit improvement can be critical to your financial well-being and must be done properly. If you find yourself confused or at a loss just reach out for help.
Copyright © 2010 Sky Blue Credit Repair. All Content. All Rights Reserved.
Credit Repair: Powerhouse Score Booster
Your Big Credit Repair Break
If you have had credit problems and are in search of the best credit repair technique to boost your credit scores, look no further. The latest release of the FICO algorithm provides an amazing score boosting opportunity. In keeping with the spirit of FICO, this is not a magic trick, but a means of rewarding those who prove their worth. Here is the latest, most powerful way to add serious points to your score.
New Accounts Count Most
This awesome credit repair technique taps the hidden power of FICO. You made some errors in the past. Now is your chance to prove you can get back on the horse and ride. Your credit score is not just about your history, it is a way to rate your ability to manage the process of borrowing. This includes opening accounts, repaying promptly, and managing responsibly. And FICO is just waiting to reward those who can show that they are still in the game.
The Easy Path
Are you worried that you will be denied for new credit? Worry not. Secured credit cards are the perfect credit repair option. A small amount of collateral, usually three hundred dollars per card, will guarantee approval for some powerful plastic capable of rocking your credit score world. The best of these little secured cards will not consider your credit history, will report to all three bureaus, and will not even indicate a secured status.
Old Accounts Still Count
If you have read this far, have credit cards that survived the storm, and are thinking that you should not have to open more, alas, you are wrong. The key to this credit repair tip is to ride the wave, to respect and take advantage of the power of FICO. It is all about new accounts. This does not mean that you should scrap your old cards. Keep them alive and manage them right. Old is gold, but new will deliver the score boost you need.
Card Management Secrets
Once you have your new secured credit cards in hand it is up to you to manage them for the best results. And make no mistake, it is easy to blow it and miss your credit repair opportunity. You must make your payments on time, and you must keep your balances down. Everything you do with your new cards will communicate something to the scoring model. For credit repair purposes you should only use twenty percent of the card limit. Got it?
The Big Pay Day
For most people attempting to regroup after a tough time, two little secured cards will be worth over one hundred points within six months of the initial reporting date. It could be more or less depending on the overall depth and content of your report. A boost like this can make a life-changing difference. This type of improvement may qualify you for superior auto financing or even a mortgage. In the long run you may wish to phase out the secured cards in favor of lower cost unsecured cards, but that should be an easy path, as you will begin to see offers arriving in your mailbox before you know it. Good luck!
Copyright © 2010 Sky Blue Credit Repair. All Content. All Rights Reserved.
Managing Your Credit Cards for Credit Repair Success
Introduction
Successful credit repair involves a broad approach to cleaning up your credit report and restructuring your credit. Everything matters. But some aspects of credit repair are more potent than others. Among all of the techniques you can use to boost your scores, the proper management of credit cards is the most powerful. Proper use of your credit cards can easily yield a 100 point improvement in your scores. Put these powerful techniques to work today.
Getting New Cards
If you do not have credit cards, now is the time to get them. If you want your credit repair results to really shine you cannot overlook the power of properly managed plastic. If you have had credit issues in the past you may be concerned about being approved. If you are unable to get approved for regular credit cards try secured cards. Secured credit cards are the ideal credit repair tool. If you have no open credit cards right now, two new secured cards will be adequate to get your scores moving up!
The Right Cards
Not all credit cards will benefit your credit repair effort equally. In fact, some credit cards can hinder your progress and may even be harmful. Department store credit cards and consumer credit cards, such as gas cards, are of no value for your credit repair and should be avoided. For score building purposes you should stick with mainstream cards like MasterCard and Visa. Small limits are fine! The key to success is keeping the right balances.
The Right Balances
The credit scoring model used by most lenders is called the FICO model. FICO places a significant amount of weight on the relationship between your account balance, as reported to the credit bureaus, and your limit. For credit repair success it is imperative that you keep your balances low. The FICO model recognizes card limit capacity utilization in 20 percent increments. If you run your balance over 80 of your limit your scores will tumble. But use less than 20 percent of the cards capacity and you will be richly rewarded with higher scores.
The Right Timing
Managing your credit card balances for credit repair success is an art. In theory there is no harm in using your cards to their limit as long as you manage to reduce the balance before the date that the creditor reports the card balance to the credit bureaus. This is not as easy as it seems. Many people pay their balances in full when they receive their monthly bill, only to be shocked to see that their credit report shows that their cards are maxed out. It is unlikely that the billing cycle and the creditors schedule for reporting to the credit bureaus will coincide. For credit repair purposes you may want to reduce your balances and keep them low.
Putting it All Together
Would you like to give your credit scores a powerful boost? Now is the time. Employ these credit repair techniques to harness the power of your credit cards. If you do not have any open credit card accounts, open two new accounts today. If you do cannot get regular cards, get a couple of secured cards. Stick with MasterCard and Visa, and avoid store cards and consumer accounts. And keep those balances low if you want your credit repair effort to pay off. You can do it!
Copyright © 2009 Sky Blue Credit Repair. All Content. All Rights Reserved.
How To Build New Credit For Credit Repair
Credit Repair, the Big Picture
There was a time when the credit repair industry was focused exclusively on sending dispute letters to the credit bureaus. Those days are over. There is no question that intelligent and well structured dispute letters are very effective in cleaning up erroneous derogatory information, and it is a thrill to see these bad accounts removed or corrected. But, as important as credit bureau disputes are, unless you put equal emphasis on building new positive credit you are missing the vast majority of benefit that is available from the credit repair process.
Money in Your Pocket
It is no exaggeration to say that well over fifty percent of the benefit of a smart credit repair program will come from careful building and management of positive credit. Why would you ever settle for a one hundred point increase in your score if you could get a two hundred point increase? The right approach to credit repair can easily mean a difference between loan approval and denial, or the difference between a low interest rate and one that will strain your budget. Over the last few years credit markets have shifted almost entirely credit score based pricing. Your credit score translates directly into dollars and cents, your dollars and cents.
Getting Secured Credit Cards
If hard times have left you with no open accounts you should get back on your feet with two new secured credit cards. Secured cards are the perfect credit repair tool. They will require a small savings deposit, usually two or three hundred dollars. This money is used as collateral to secure the limit on the card and will be returned to you when you close the account. Because these cards are collateralized you will not be denied unless you have previous unresolved issues with the card issuer. They are easy and cheap, and for credit repair purposes, they are every bit as good as a larger unsecured card.
Consider Authorized User Accounts
If you are interested in giving your credit repair program a little extra boost there is another credit building strategy you may consider. If you have a family member with excellent credit that would like to help your endeavor you can ask them to add you to one of their credit card accounts as an authorized user. Once they do this the account should appear on your credit report within sixty days and your credit score will inherit the full benefit of the account as if it were your own. On a cautionary note, you should not consider purchasing authorized user accounts as the software used to calculate your score has a way of blocking these brokered accounts.
Cautionary Notes
If you were choosing between secured cards and authorized user accounts, secured cards are the best long term credit repair option for the simple reason that they belong to you. Authorized user accounts come with notable risks. If your card donor runs his balance up your score will tumble due to no fault of yours. And if for any reason the account goes bad you are likely to have trouble removing yourself, as card issuers usually will refuse to make any changes to the account until it is healthy again. But, if you have the ability to include both secured cards and trusted authorized user accounts in your credit repair program, by all means do it.
Picking the Right Type of Credit
When it comes to credit repair you should build credit with mainstream credit cards such as MasterCard and Visa. There are certain forms of credit that can harm your credit more than helping it. The credit scoring software that calculates your score has a built-in bias against consumer debt including store cards and furniture store loans. So do not assume that because you have a store card that you have the credit profile that you need. This type of credit can be convenient and may have certain benefits, but while you are in a credit repair program it should be avoided. Stick with the basics.
Managing for Credit Repair Results
Once you have your credit cards open it is crucial that you manage them properly. This is where you credit repair effort can really shine. The credit scoring model places great weight on the balances that you keep on your credit cards and the newer the card the more important the balance becomes. For the best score benefit use less than twenty percent of the total credit line on the card. If you let your balances run up to the limit your scores will fall, as much as one hundred points depending on the overall content of your credit report, so spend carefully. If you have this problem, do not worry. Just pay those cards down and your score will pop right back up. Good luck!
Copyright © 2009 Sky Blue Credit Repair. All Content. All Rights Reserved.
FICO Offers Credit Repair Tips
Credit Repair in the News
Credit repair is more important than ever. In a recent interview with MarketWatch, a Wall Street Journal website, the Consumer Operations manager for the MyFICO division of Fair Isaac spoke out about the importance of checking your credit reports. In the words of the article, “There may be some surprises waiting for you.”
A New Credit Repair Landscape
Creditors everywhere have tightened their guidelines. This new credit environment has made credit repair more important than ever before. And to make things even more difficult in these already challenging times, credit card issuers have begun to reduce cardholder’s credit limits in order to reduce their own risk.
The Limit Reduction Problem
This action is doubly hard for consumers. First, these limit reductions are happening unexpectedly, even to those who have never made a late payment. And second, and even more damaging, is the snowball effect that follows. A major part of your FICO credit score is based on the relationship between your current balance and your credit limit. When a creditor cuts your limit your balance-to-limit ratio increases and your credit score will fall, through no fault of your own.
The Snowball Effect
And the snowball starts rolling. Once the first creditor drops a limit and your scores fall, other creditors are likely to drop your limits as well. And the lower your scores the more prone you will be to this perfect storm of credit repair trouble. What to do?
Good Credit Repair Advice
The Consumer Operations Manager for MyFICO suggests that you do everything in your power to insure that your credit report is as clean as possible and your scores are optimized. And don’t make the mistake of thinking that paying your bills on time (as important as it is) is you need to do. Credit repair knowledge is power. Here is a summary of his credit repair tips, and our extrapolation.
Check Your Credit Reports
Look for changes in your account limits. And while you’re at it, check for errors. Errors come in many shapes. Derogatory information should cease reporting, generally, after seven years. You should know that the seven year reporting period clock starts on the date of the original default with the original creditor. The original default was the first reported late payment in the sequence that led to the charge off or collection status.
Collectors cannot reset the clock with subsequent reporting. And while we are on the subject of collectors, you should know that if a collector no longer owns the debt, he is supposed to remove the account entirely from your credit report. When in doubt, challenge the item with the credit bureaus or hire a credit repair professional to manage the process for you.
Don’t Get Close to Your Credit Card Limits
A significant percentage of your credit score is based on your balance-to-limit ratio. Reduce your balances as much as possible. Less than 20% of your limit is the optimal balance. Many people are blindsided by precipitous drops in the scores when they max out a card, even when they have never been late on a payment.
Keep Accounts Active
Use your cards to keep them alive. Dormant cards are in danger of being closed by creditors and unless you have plenty of open accounts this could cause a drop in your scores and send you in search of credit repair solutions.
Pay Your Bills on Time
This seems like a no-brainer, but it is so important. Make sure you understand the impact your purchases will have on your budget. Try not to let yourself get spread too thin. A single late payment can have a big effect on your scores, and may even trigger adverse action, such as limit reduction, by your creditors.
Don’t Apply for New Credit Cards
We have warned against store cards for years, and MyFICO agrees. Store cards can be credit repair suicide as they often present a triple threat. First, you will have an inquiry. Second, you will have a new account which will weigh down your credit scores for several months. And last, and worst, is the fact that most store cards offer a credit limit only marginally over the amount of your purchase. Put these together and you get credit repair trouble.
Call for Credit Repair Help
If you are confused by all of the components of credit report and score management, or don’t have the time to handle the task on your own, don’t give up. Call a credit repair professional for help. A credit repair professional will manage the process for you and insure that everything possible is done to optimize your credit. Good luck!
Copyright © 2008 Sky Blue Credit Repair. All Content. All Rights Reserved.