10 Tips to raise your credit2017-12-14T15:07:10+00:00

Raise and Rebuild Your Credit Score With These 10 Tips

The journey to raising your credit scores of ten feels overwhelming, confusing, intimidating and often filled with extreme shame; it does not have to be that way! If you don’t know where or how to start improving those score’s you will find this little tip sheet invaluable. Take your time, allow yourself to enjoy not only the process, but the rewards that will come if you follow through.

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How to fix my credit fast

Did you know you can order one complimentary credit report on an annual basis from www.annualcreditreport.com? What you do when you have it on hand is first to follow my Color My Credit steps and then…

Dispute all errors directly with the three credit bureaus (Transunion, Experian, and Equifax). If you are comfortable with the Internet, the most efficient method is to make the disputes online.
Note: If you are looking a making a home purchase, you will also want to work with me to pull a mortgage credit report from which we will build a game plan to raise your mortgage score most rapidly.
The Key: One of the most often items overlooked on a credit report are items that should have been removed from it after seven years from the first reported delinquency.

We have been working with you to get two credit cards, for which you will use only 10% of the available credit. Remember, if your credit limit is $250 you will only put $25 on it for something you would already be spending on something essential and paying it off in full each month. If you already have a card you’ve been using, but it is well over the 10% and you are currently unable to pay it down to under 20% of the limit, call the credit card company and request a credit limit increase.

The Key: 30% of your credit score is based on the ratio of your credit card limits versus the balance the company reports.

Ok… another step you might not have considered. Review your credit report and see if there are any open credit card accounts. What you are looking for is an open credit card you may have opened and for whatever reason stopped using it. Call the company and request a replacement card. When it arrives, activate it and go make a small purchase that you know you can pay off at month end.

The Key: Accounts not used within the past 24-months are normally not factored into your credit score either as an open account or for the length of time in use factor. I have personally seen clients increase their scores by 30 points simply by activating an old card and making a $30 purchase at Penny’s or Victoria’s Secret.

Many financial repair/recovery experts admonish us to pay off all debt! While that may look good on the surface, when it comes to raising your credit score I implore you—don’t do this! Installment loans for cars, furniture, medical expenses, etc. all play heavily into rebuilding your credit score.

The Key: Every month you make another payment on your installment adds to your scores; when those payments end, the account closes and the scoring model makes it appear you have a lot less credit available to you.

Setting up auto-payments through your bank is efficient; however, you must still monitor that they do go through as scheduled. There is a growing trend of these payments being missed due to some technical malfunction. If you see a missed payment that fits this category and is showing up as a 30-day late, call the company and state your case and request a “goodwill removal.” Be clear you haven’t been late before and the late is negatively impacting your credit score, and request they send you a written statement regarding the removal of the 30-day late. If the company does not agree to this request, push the issue… ask if you make three consecutive on-time payments if they will reconsider. If that’s a yes—mark your calendar to make that call again!

The Key: You are ultimately responsible for your credit score –and you can impact change by being proactive. Oh! And don’t ever take “no” as the final answer!

Stop and assess when you are making your monthly payments on your credit cards. I am sure most of us tend to the payment dates to the receipt of our payroll checks, but when it comes to managing our credit scores, it should not! For example, you get your check on the 15th, pay your bills on the 17th, and then in the assessment of when your creditors actually report, you discover the day they report is the 9th! And there you sit, an amount much higher than what you actually one showing in your report for 30-45 days. Time for some action! Call your creditors, ask who all they report to, and when they normally report. Your next step is to mark your calendar as a reminder to pay down the balance before the creditor reports.

The Key: The payment date on your monthly statements is not necessarily in concert with the creditor’s reporting date; it is to your benefit to know this information. Perhaps you can make two payments in close proximity to each other so you can adjust your payment perhaps from the 17th to the 5th.

Derogatory reports are not always impacting your score. Check the date last updated or reported. If it is more than 24 months you can rest assured it is most likely not being factored into your score. If, in your awareness, sense of honor or integrity, you feel compelled to pay it off—do not do so as you work to raise your credit score! Any activity at all—even paying it off—could reduce your score, unless you get the creditor to agree to delete it from the credit report if/when you pay it off.

The Key: You can never make a collection become good on your credit report—unless it is removed and the process of paying it does not automatically remove it.

Not all credit scores are created equal! Did you know there are over 50 different models/scores for each of the credit bureaus, depending on the type of credit for which you are applying? Technology and marketing make some companies, such as Credit Karma and other free sites more visible to consumers. They use FICO’s competitive Vantage Scores—which although similar to FICO scores, use different criteria and are thus not looked at by mortgage companies.

The Key: If your goal is to increase your score with the intent to apply for a mortgage, you have to work with someone who helps you take the right steps to rebuilding your FICO credit score. (Hint: me!)

Quick tip this one! If you have no credit, or perhaps your spouse or child is trying to build or build their credit, you simply add them as an authorized user to your credit card. A simple request to the credit card company can make that happen. They do not have to have a card to use, and they can be removed at any time. They will get credit for your history because it affects the length of credit and payment history that is currently lacking.

The Key: There is no reason to worry about adding the benefit of another’s credit. Whatever is on the other person’s credit is not contagious; nor will it bar or blemish a good one with which it is connected!

Do you sometimes despair at a lengthy period of bad credit? When it comes to your credit score it may not be as bad as you think! Your credit scores are affected primarily by what has transpired in the past 24-months of reported information. It is possible to start today and expect some changes in the very near future. Just getting two cards, and following the strategic steps noted in the previous tips will surprise you! Whatever your limit, don’t spend more than 20% of the limit, and consistently make purchases between $20-30 each month and pay them off before the reporting date. Make the purchase something you are already committed to each month, preferably something small you can easily set up on auto pay through your bank.

Resource | Secured credit card links:
The Key: Every month these credit cards report a less than 80% balance and an on-time payment means the closer you come to drowning out bad credit and increasing your scores.
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