Archives for "Quick Fixes"

The benefits of great credit are significant. The effort that you put into improving your credit score will be well rewarded. Here are the some powerful credit repair strategies that can produce dramatic results in a short period of time.

Check Your High Credit Limits

The relationship between your current balance and the available credit limit on each of your revolving accounts has a major impact on your credit score. Consumers often overlook this important issue. Each and every revolving account on your report should be examined. If the high credit limit is understated send a dispute letter to each of the three credit bureaus asking them to update the information. Don’t bother calling the credit card companies directly. The credit bureaus are responsible. Let them do the work. The results will be better and faster.

Increase Your High Credit Limits

There is one additional course of action that you should consider that can also reduce the ratio of your current balance to your high credit limit. Call each and every credit card company and ask them to increase your available limit. They may or may not agree, but you might be surprised. By the way, please keep in mind that you are doing this to improve your credit. Having a higher credit limit does not mean that you should use it.

Check the Age of Your Accounts

New accounts count against your credit score. Conversely, the credit bureaus will reward you for the accounts that you have maintained over time. When reviewing your three credit reports be sure to look carefully at the initial reporting date for each revolving and installment account. If the age of the account is incorrect on your credit reports send dispute letters to the bureaus. Here also don’t bother contacting the creditor directly. You will find that this is well worth the time involved.

Resurrect an Old Account

It is not unusual to discover an account on your credit report that you forgot about years ago. If you don’t have much credit please don’t cancel the account. If you no longer have the card in your possession I suggest that you call the company and obtain a replacement card. When you get it you should make a small purchase. The exact algorithm used in the FICO score is a secret, but based on our observations it is best to have some occasional activity on a credit card. Old accounts are good accounts!

Secured Cards

If you have limited credit and want to improve your credit score it is essential that you get a few credit cards. Secured credit cards are an excellent option that is available to everyone regardless of credit history. In our credit repair services we recommend this course of action. It is true that opening a new account will have an adverse impact on your score, but it is worse to have a lack of credit. In this situation secured cards will have an important and positive impact. Typically there are some fees involved with these cards as well as relatively high interest rates.

Authorized User Cards

In addition to getting a couple of secured credit cards you should also ask a trusted friend or relative if they will make you an authorized card member on one of their accounts. Currently the FICO scoring model seems to give new authorized card members the full score benefit of the principle card members credit history. Please be aware that authorized user status is not the same as additional card member status. Authorized user status does not require that you qualify, and either your friend or you can cancel your status at any time. I suspect that both you and the principle card member will favor the authorized card member status.

Post Bankruptcy Cleanup

If you have had a bankruptcy you should take action to clean up your credit with all three bureaus immediately upon receiving your discharge. If you don’t feel up to the task of dealing with the paperwork I suggest that you hire a reputable credit repair company. A reputable credit repair company will be inexpensive and be able to do this for you very quickly. The credit bureaus are required to remove all of the derogatory information from each account that was discharged. If you don’t take action to clean up your credit report it will not happen by itself. A comprehensive post bankruptcy clean up can have a dramatic impact on your credit scores within as little a sixty days after your discharge.

Perhaps you have had credit issues in the past and are trying to get back on track. Or maybe you have perfect credit and want to make sure it stays that way. Here are some important credit repair mistakes you should avoid where possible.

Beware of Store Cards

Department stores love to push their credit cards by offering a discount on your purchase if you sign up on the spot. This can be a good deal. But it is handy to know that store cards create triple trouble on your credit report. First, your score will be reduced because of the inquiry. Second, your score will be reduced because of the new account that will soon appear on your report. And third, store cards tend to give a low credit line, often just above your purchase amount. This can be terribly damaging as the FICO credit scoring model puts a lot of weight on the relationship between your balance and your high credit limit.

Watch That High Limit

We speak to people all day long about their credit reports. One of the bits of advice that we like to offer our customers is to pretend they only have half the limit on their credit card that they really have. It takes some discipline to do this but it can make a big difference on your credit score. As soon as your balance exceeds fifty percent of your available limit your credit score will start to suffer. If your credit balances are currently close to your credit limits you might consider calling the credit card companies and asking them to increase your limit. You will be amazed at how fast this can make your score go up!

The Auto Shopping Credit Trap

I can’t tell you the number of times that we have looked at a credit report and seen multiple auto credit inquiries. When we ask our customer they inform us that they only went to two different dealers. Auto dealers will often shop for the best interest rate for you. If they shop with three auto finance companies you will have three credit inquiries. These multiple inquiries can have a significant impact on your score. This is not the auto dealers fault. After all, they are acting your best interest, but it is best to be aware of the possibilities. If you are shopping for a car I would suggest not providing your Social Security number until you are settled on the car you want.

No More Mr. (or Mrs.) Nice Guy

Just about every day in the credit repair business we come across someone that was nice enough to co-sign for someone on a car loan. I’m sorry to say this, but chances are that if they need you to co-sign they will not make their payments on time. And this will kill your credit scores. I know that this is a tough call. It is hard to say “no”. If this situation arises in your life I suggest an alternative approach. Go ahead and co-sign. But when the payment book arrives ask them to give it to you. Have them pay you instead of the auto finance company. You will make the payments on time. And maybe they will feel some extra obligation to make their payments to you on time as opposed to some anonymous auto finance company.

Don’t get complacent

Check your credit from time to time. In December of 2003 Congress passed the Fair and Accurate Credit Transactions Act (FACT Act) which, among other things gives you the right to get a free credit report from each bureau one time per year. This law was passed to protect you from the credit reporting errors that occur far too frequently. Don’t imagine that because you are doing everything right that the credit bureaus are reporting everything correctly. Get your reports and proof read them carefully. It’s your right.

No explanations needed

Are there errors on your report? Whatever you do please don’t write an explanation for the credit bureaus to include on your credit report. No creditor wants to see your story. Sorry! But it’s true. If there is something wrong on your credit report you should dispute it! If you don’t feel up to the challenge of dealing with the credit bureaus hire a reputable credit repair company. They have the experience and knowledge to get the job done for you. A good credit repair company should be affordable and efficient. You should never have to commit for a predetermined period of time. Before you hire someone pick up the phone and talk to them. Make sure you are comfortable. It’s your money

Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.