Archives for "Rebuilding Credit"
Super Effective Credit Report Repair Tips
Tricks of the Trade
Credit report repair, done right, can do wonders for the appearance of your credit report, and your scores too! Here are a few awesome credit repair tips that will really make your scores move fast. Put them to work individually, or all at once, depending on your own needs, and watch the magic happen.
Open Accounts Right Now
The FICO scoring model will give you bonus points for opening new accounts after a period of bad credit. It is all in the timing. Those old cards that survived the tough times are still worth something, but when it comes to credit repair FICO wants you to prove that you still have what it takes to get back in the swing of borrowing money. If your credit is crummy, secured credit cards are ideal. Small is good! Open now, pay on time, keep your balances low, and your scores may rise over 100 points in the next six months.
The Balance-Limit Connection
This credit report repair tip is just as urgent for those opening new accounts today as it is for those managing already well seasoned revolving accounts. Holy cow! A little change in your balances can send your credit scores flying or diving. Have you maxed out a card lately and then checked out your scores? This is a fairly recent FICO tweak which can work for or against you. Try to use less than 20 percent of your limit for the best result.
Store Cards Do Not Cut It
While you are working on your credit report repair project, do not apply for any store cards. And if you already have some, start chipping away at the balances until they are zeroed out, and leave them there. Store cards should only be used if there is some great financial incentive. Use them, save a buck, and they pay them off. There are a few reasons. The biggie is that FICO just does not like them. They will yield the smallest credit repair benefit when you manage them well, but they will kill you if you do not.
Send Dispute Letters
Review your credit reports. Grab a highlighter and mark up everything that looks funny. Send dispute letters to the credit bureaus. And if you do not like the results, dispute again. If you want the job done like a pro, you can hire a pro. Credit repair services are a great value and will manage the whole dispute routine for you until the job is done. They may even spot a few choice ways to get your scores to pop. It is worth it.
Got a Few Bucks?
If you have any collections, now is the time to try to negotiate a deal. Here we are in 2010, and collectors are hungry. Plan your call in advance. Have the money to send right on the spot if you strike a good deal, and let them know you can. It is a great credit repair tip. You may even be able to get them to knock the collection off your report. The last Friday of the month can be a great time to try this. 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.
Credit Repair Life Lessons
Introduction
The credit repair stories you are about to read are true. They are meant to entertain as well as educate. Credit repair is not difficult. But it takes some thought. For those who approach credit repair cautiously success will be certain and satisfying. For those who act hastily the outcome can be less than happy. The good news is that mistakes can be corrected, and with any luck the lessons learned will lead to great success, as you will read below.
Don’t Forget to Rebuild
Jason started out his credit repair program with a lot of enthusiasm. He was thrilled to see the derogatory items come off his report month by month. After almost six months of credit repair he went to MyFICO.com to check out his scores and was disappointed to see that they had risen only marginally. He consulted an expert about the situation. The credit repair professional explained to him that derogatory information had been depressing his scores, but without positive information his scores would not rise satisfactorily. So Jason opened two secured credit cards, making sure to pay on time and keep the balances low. It took some patience, but six months later, Jason checked his scores and was astounded to see that they had risen 150 points. It was a wonderful outcome.
Watch Those Balances
Becky had been in a credit repair program for a few months and her credit scores had risen dramatically. Her goal was to buy a house and she felt that she was almost ready. Several weeks before she was going to apply for her mortgage she bought a new television and paid for it with her credit card. She thought it would be great in her new home. When Becky applied for her mortgage she was shocked that her scores were 100 points lower than they had been only 45 days prior. Her credit repair consultant looked at her report and saw that the purchase of the television had pushed her credit card balance to the limit. At his advice she reduced the balance and a month later she re-applied for her mortgage, this time there was no problem. Her scores were higher than ever and she was approved for a great low rate mortgage.
Check the Statue of Limitation
Ethan was contacted by a collector who offered him a tempting deal of twenty-five percent off the original balance owned. The deal seemed fair, but because it was a significant amount of money Ethan decided to consult a credit repair expert first. The credit repair expert researched the statute of limitation (SOL) and calculated the amount of time that had passed since the original default date. It turned out that the debt was two years beyond the expiration of the SOL and only one year short of the reporting period limit. The credit repair expert explained to Ethan that because the debt was past the SOL the collector did not have legal recourse, which usually makes a debt very negotiable, and because it was only one year short of the reporting period limit he could even opt to ignore it as it would fall off soon enough. Ethan decided to call the collector and make a reduced offer. Once the collector understood that Ethan knew the law he settled for far less than his original offer. The little bit of credit repair homework saved Ethan thousands of dollars.
The Moral of the Story
Jason, Becky, and Ethan ran into obstacles in their path. But the solutions were easy and delivered terrific results. There is never a cause for worry. If you have taken a wrong turn just correct your course and before you know it you will be enjoying the positive results you deserve. Credit repair is not difficult, but it is essential to pay attention to the details. There is nothing wrong with undertaking the task of credit repair on your own, but if any time you feel that you need help, you should reach out and consult a professional. Your credit is important and every detail matters. Good luck, you can do it!
Copyright © 2009 Sky Blue Credit Repair. All Content. All Rights Reserved.
Credit Repair and the Secret to Rebuilding Your Credit
Everything Counts!
Credit repair is not complicated. Your credit scores reflect the content of your credit report, both the positive as well as the negative. Many people in credit repair programs are so focused on the negative that they neglect the positive. No matter how effective you are at cleaning up derogatory information on your credit report, unless you take the time to build new positive credit your credit repair effort will languish.
Credit Repair Logic
The logic is easy. Your credit scores are intended to reflect the amount of risk a lender will face when lending you money. In the credit repair process you should think of your credit score as an impartial witness of your life, judging your ability and willingness to meet your obligations. The best way to impress this impartial witness is to offer proof of your willingness each and every month.
Revolving Credit Rules
The most powerful way you can offer proof of your credit worthiness and influence your credit repair progress quickly is with the proper use of revolving credit. If you don’t have any open credit cards, now is the time to open them. If your credit is currently too weak to get regular unsecured credit cards, just get secured cards. It’s easy and will do the trick.
Credit Repair and Secured Credit Cards
Secured credit cards are every bit as helpful for your credit repair as regular unsecured cards. It does not matter if the limit on these new cards is miniscule. Your credit scores will get the same benefit from a little secured card as it will from a high limit unsecured card, as long as you manage it in the right way.
Credit Card Management
Credit card management for score optimization is not difficult, but unless you know what to do mistakes are likely, and your credit repair project may even suffer when it could have easily succeeded. Timely payments are essential of course, but the real trick to credit repair success is to understand the relationship between your balance and the limit on the card.
Your Scores Are In Your Hands
The impact of your credit cards on your credit repair will depend almost entirely on your balances. This is always the case, but is even more important during the first year after a card is open. There are five ratios that will trigger score changes; 20, 40, 60, 80, and 100 percent usage. Sixty percent usage of a card will have a neutral effect, the two tiers below will increase your scores, and the two tiers above will reduce your scores. Don’t underestimate the impact; maxing out a new card can knock 150 points from your scores.
Credit Repair with the Right Credit
There are a few other important factors to consider when rebuilding credit. Not all credit cards are equal. Store cards are of little value for your credit repair. For undisclosed reasons, the geniuses behind the credit scoring formula have downgraded the benefit that accrues from store cards, and amplified the harm that can result from having them. Likely reasons include the fact that store cards are easier to get, usually have higher interest rates, and consequently may be an indicator of poor judgment on the part of the consumer. Hey, I’m just reporting the news! Do yourself a favor and stick with MasterCard, Visa, Amex, and Discover.
Your Credit is Alive
When it comes to credit repair there is no good substitute for new revolving debt. A new auto loan is helpful, but will not have the impact that a credit card will have. Credit cards are emphasized because they are open-ended and alive; each month they report they can reflect something new about your financial life. If you keep your balance low and make your payments on time it will tell the credit scoring model that you are living conservatively and within your means. If you max out a card it is interpreted as a warning of budgetary strain and potential default.
You are Not Alone
Credit repair is not a difficult process, but it requires a bit of know-how and even a dash of finesse. If you take your time to plan the credit repair process you will succeed and see your efforts rewarded beyond your expectations. And always remember that help is available. If you are in doubt pick up the phone and call a credit repair professional. You are not alone!
Copyright © 2008 Sky Blue Credit Repair. All Content. All Rights Reserved.