ssyndergaard
9 Posts |
 Posted - 08/14/2008 : 3:47:29 PM
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5 Quick & Easy Ways to Improve Your Credit
Want to learn 5 fast and easy tricks to improve your credit score - FAST?
I know silly question. Of course you do.
Google the phrase “Credit Repair” and you’ll find hundreds of thousands of websites publishing the same generic, useless information about “under the FCRA you have the right to dispute…yada, yada."
Sure, it’s important to know how to remove negative items from your credit report (that being the worst way BTW), but removing negative items is only one part of a good credit score.
We’ve helped tens of thousands of people just like you - raise their credit scores by 80, 90 and even 100 points before we even begin to remove negative items.
Want to know how?
Your payment history is only 35 percent of your credit score. The second largest factor in your credit score is your credit utilization – fortunately for you, it’s also the easiest to manage wisely.
Tip One: Pay your credit cards before the closing date.
Credit card companies like to report your balances the same time they mail you your bill.
If you’ve ever pulled your credit report and noticed it’s not showing the payment you just made – that’s why.
So how can use this to your advantage?
Call your credit card companies and find out your closing dates. Make sure your payments are in before that date; don’t wait for your bill to arrive.
*Bonus Tip: If you’re not maxed on your credit cards, with a little planning you can shift balances between your cards based on closing dates. It will appear as though you have no balances. Of course really having no balances is best.
Tip Two: Keep Your Balances Below 10% of Limits. I read a lot of websites that say keep them below 50 percent.
Yes 50 percent is better then 60 but not great. The real impact comes when you get them below 10%. If you simply do not have the financial resources to pay them down, see Tip one.
Tip Three: Make Sure Your Credit Limits are Reporting A lot of credit card companies don’t report your spending limit. They do this because they don’t want their competitors seeing their lending habits. Capital One is notorious for it.
Here is why it hurts you.
When your credit limit isn’t being reported - the scoring system can consider the highest balance you’ve ever had as your limit.
Example:
Your limit: $10,000 (actual limit) Your highest balance: $4,000 (will be considered your limit) Your current balance: $2,000
If your actual limit was being reported, you’d only be at 20 percent utilization. In the above scenario, it’s showing you’re at 50 percent utilization.
Tip Four: Keep Your Spouses Credit File Separate Keeping your spouses credit file separate is, in my opinion, is just a good idea. Not because you may get divorced.
But because you can help each other out of credit jams. I can’t tell you how many clients we’ve helped get home loans by utilizing one spouse’s credit lines to pay the other spouse's off.
Yes, the paying spouse takes a hit, but after the loan closes you can shift the money back and quick claim the deed to both names.
If you don’t understand this one, feel free to contact us with your questions.
Tip Five: Watch Your Past Due Amounts You know when you get your bill and it says something like…
”your payment is “X” if paid by the 1st and “X” if paid later then the 15th”
I see a lot of people wait that extra two weeks just to keep the money in their pockets a few more days. That hurts your credit. While it may not be considered a “30 day” on your credit report, it will be reported as a “past due amount”.
Always pay your bills on, or before the due date.
A final note: The above tips in most cases can yield pretty dramatic credit score increases pretty quickly. However, they shouldn’t take the place of responsible spending habits. If you’re using these techniques, chances are there is a bigger problem. Learn to budget, spend within your limits and act responsibly.
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