Tips For Credit Repair

Credit scores are the primary way banks judge your credit worthiness.  Credit scores range from 300 to 850 — the higher number, the better.  If you have a score below 550 you are going to have challenges getting loans for a car or even a mortgage. You are legally entitled to look at your credit score for free — you do not need to purchase anything.  These are some of our best tips to help learn your credit score and learn how to raise it.

Tip #1 – Learn the Basics of Credit Scoring

There are 5 key factors that determine your credit score. Learn how to use these factors to your advantage:

  1. Payment History – The most important thing you can do is make sure all your credit cards are paid on time. Late payments are the biggest shot to your credit worthiness.
  2. Amount of Credit In use – You want to keep the amount of credit you are using below 20% of what’s available to you.  If your combined credit available is $10,000, you want to make sure you’re not maintaining a balance more than $2,000.
  3. Age of Your Accounts – Keep your accounts for as long as possible. Ideally, you would want to have at least one or two credit cards open for years. This shows you are able to maintain your “impulse buying” and only use the credit cards when necessary.
  4. Mix of Credit Types – This is difficult for a young person getting started but it refers to a mix of credit cards, personal loans, car loans, mortgages, etc. You don’t want to be heavy on one type or another.
  5. Amount Of New Credit You Have – Just because you get an offer for a new credit card doesn’t mean you should take it.  Keep the amount of new credit you have to a minimum and only grow your available credit when necessary.

Tip #2 – Access Your Credit Report Annually

Your credit reports determine your credit score. It only makes sense that you see what’s on them. According to federal law, you are legally entitled to look at your credit reports once a year. You can see all of your credit reports from the 3 major credit bureaus at once by going to annualcreditreport.com. Looking at your report will allow you to see the factors that are directly affecting your credit score.

Tips #3 – Pay Your Bills on Time

This point cannot be stressed enough so we will mention it again. Nothing will affect your score more negatively than late payments.  Although the effect will diminish over time, you want to avoid this at all costs. Approximately 35% of your credit score is directly affected by your payment history.

Tip #4 – Pay Down Your Credit Card Debts

The next biggest contributor (30%) to your credit score is the amount of debt you let ride, month to month, on your credit cards.  If you continually let your credit cards stay maxed out, it will have as much of an effect on your credit score as late payments.  Even if you pay off your balances each month, the amount of credit you’ve used at the time of your monthly statement is the amount of debt used to calculate your credit score. Keep your balances low at all times during the credit card cycle.

To help keep you on track, we recommend a piece of software called You Need A Budget.  This piece of software will help you learn to spend within your means as well as control your credit card spending.

Six Super Tips for Credit Repair

Credit Repair Success has little to do with common sense, and much to do with technology. If you are not the right moves, they are popular FICO scoring model, a credit repair effort to produce less than stellar results. But the right decisions, and you will be surprised to rapid progress. Here are six great tips for credit repair effort to get on the track.

Build New Credit Cards

If you do not have any open credit cards, this tip is for you. Too many people start their credit repair project into thinking that a few new cards if they have cleaned up their reports. This is a serious tactical error. You need to start rebuilding credit today. The two new credit cards can be worth up to 150 points of your results within six months. Do not worry, you can not get approved for regular credit cards, only a two-secured card to obtain.

They are the perfect credit repair tool. You may not prohibit, and before you know your score is on the way up.

Reduce How Much You Are Using Your Cards

If you have a credit card that you need to manage them the best credit repair results. Let them not go to zero because the FICO scoring model calculates a score for the value of the active cards, and keep balances low. This applies to all credit cards, but more importantly they just secured cards. Ideally, you should use only twenty percent of the total quantity available. If your account balance raise the results of the trap. This is important. Maxed out card can cost more than 100 points.

Avoid Store Cards

the subject of credit cards, not everyone has the same value of the credit repair project.

Stick with the major, like MasterCard and Visa, as well as in the whole store cards, to avoid at least if you’re trying to build credit. The reason for this admonition that the FICO scoring model for the results to drop when you see that you decided to use this is typically worse in the form of debt. Loyalty cards are especially dangerous because they are generally accepted as a very small, often just above the amount of your purchase immediately a maxed out account.

Cool Your Jets

When you are working on credit repair helps to minimize the credit activities that you engage in open two new secured credit cards as above, but other than that to much activity to avoid. New studies have a small effect on the credits, but they match. In addition, new accounts, your score pressure in the first few months, they report. If the new secured cards is a necessary sacrifice that pays off in a big way in time. But so far, cool your jets and let the good things happen.

Validate Debts Fast

If you have a collection letter to open it! Do not put it in a box until you have the guts to go. Fair Debt Collection Practices Act requires collectors to prove that they are legally entitled to collect, and the book value of a collection. But they only do this if you have a request within 30 days to get a collection letter. This process is called debt validation and is a valuable aid to a credit repair effort. If the collector is unable to confirm their collection activities must cease and must take to notify credit bureaus. If they are not guilty to confirm you have the information you need to consider the negotiation strategy.

Applying for Credit Repair Help

You have to do this themselves. There are many reputable credit repair services that will help you to renew your credit reports and improve results. In addition, the strategy outlined above, there are dozens of effective credit repair techniques that might meet your needs. Many busy people choose a professional credit repair service to rent instead of trying to learn the whole process from the beginning. If you are doing and have no time to do their work well, just to hire a professional. You should be glad you did!