What makes Christmas and New Year’s better than friends, family, and savings? How about owning a home? The holiday season is a cheerful time spent with family, but for those of us with families
Great Tips on Increasing Your Credit Scores
There are plenty of ways you can increase your credit score in 30 days. If you are planning to buy a home or car soon, you will need to get your credit cleaned up so you can qualify for that low interest loan! With a little forsight and due diligence, you can reap giant rewards in the form of a lower mortgage or car payment by qualifying for better loan.
Pay down your credit cards - Paying off your installment loans may can help your score, but typically not as dramatically as paying down -- or paying off -- revolving accounts like credit cards. The FICO model and even (from what we understand) the Vantage scoring system now used by the Big 3 weight credit card debt more heavily. Each individual card as well as your total revolving line should be below 25%. If your goal is to increase your credit score - forget about paying down your high interest rate cards first. Work on getting those balances down over higher interest rates to reap the most improvement in credit score.
Don't use your whole credit line every month - Your available credit is averaged over your billing cycle, which is sometimes less than 30 days. If your limit is say, $5,000 and you charge $5,000, even if you pay it off each month, your credit balance is still going to show $2,500 (a 50% usage limit), which is going to make your score plunge.
For most small business owners, their credit cards are the way they purchase goods and supplies every month. If the card's limits are used to the hilt - this can hurt. But wait you say, these are business cards. Yes, they are and most small business owners still have to personally guarantee their business cards, which means they show up on personal credit reports. If you need to use all of the available credit line on your cards, you may want to consider getting a new card to spread out the credit lines a little.
Is your credit report correctly reporting your credit limits for your cards? If not, you can call your credit card issuer and ask them to update the list. You can also challenge the limits with the credit bureaus.
Don't use credit card issuers who don't report your credit limit - Usually this is a problem you only run into with secured credit cards, but were you aware that American Express cards and Capital One do not report credit limits? In this case the bureaus typically use your highest balance as a proxy for your credit limit, which is going to make you look like you are maxed out.
Ask a trusted friend or family member to add you to one of their old cards as an authorized user - The older your credit history, the better. If your mother agrees to put you as an authorized user on a card that she; had for 20 years, you could see your score increase dramatically. And with the authorized user plan, you don't even have to have the card in your possession if "Mom" feels better about this plan. (You'll have to work things out with her on this).
Ask a creditor for forgiveness - If you've been a good customer for years, but had a rough patch and missed a payment - you might be able to ask your creditor to "erase" a negative listing. You can do this with a goodwill letter. There is no guarantee that a lender will do this, but this method has had lots of success. Here is a sample letter to help you do this.
Get student loan payments current - If you have a student loan that you have defaulted on or have missed payments, you can enter into a "rehab program" which will get your account back on track after 12 months (ok, so it's not a short-term strategy.) Sallie Mae regularly upgrades your loan status to "Paid as Agreed" if you make a series of 12 or so on-time payments.
Dispute old negatives - Say your insurance company never paid a medical bill and now you have a collections account. You can continue protesting that the charge was unjust, or you can try disputing the account with the credit bureaus as "not mine." The older and smaller a collection account, the more likely the collection agency won't have bothered to update good ole eOscar with the correct info and the credit bureau won't be able to match up computer records.
Get a collection agency to agree to remove a debt from your report if you pay it - This method is called "pay for delete" and it works like a charm on smaller amounts of $500 and under, especially medical collections. Remember to get the agreement in writing before you pay them anything, and only send a money order after you get them to agree. Check here for more info on settling debts.
Dispute with original creditor - Our patented method of disputing with original creditors really works, especially accounts which have been purchased by other banks or are currently with a bank who has gone through some of those massive mergers in the last 10 years. And you have the cases (more common than you think) where some banks just don't keep good records at all. This method is relatively quick.
Target "easy" errors - Target the easy errors on your credit report that have a big bang for the buck.
- Negatives that truly are not yours: Late payments, charge-offs, collections
- Any Accounts listed anything other than "current" or "paid as agreed" if you paid on time and in full.
- Accounts that are still listed as unpaid that were included in a bankruptcy.
- Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your report.
- Any account that is listed as "Closed by the credit grantor" when it wasn't should be fixed as this is definitely a negative
You will notice, the first 3 items target paying down credit balances. This is for a reason - high credit balances can kill the credit score of someone who otherwise has perfect credit. It is weighted HEAVILY in your credit score. Get those balances down!
article source: Credit Infocenter
As a licensed real estate agent in Virginia, Mario provides Strategic Marketing and Transaction Management services to his clients that is built on Dedication, Communication, Determination, & Trust.....