How To Repair Bad Credit

The only sure fire cure for a bad credit report is time. Time is your greatest ally when it comes to repairing bad credit. It can take up to 21 years to remove a bankruptcy from your report provided all payments have been made on time. If you have been late with payments on your mortgage, car loan, or other loan, good old time creditors can and will report your delinquency in your credit report. If you miss payments or make payments late on a credit card, credit card companies can and will report this too.

It can take seven years to remove a Chapter 7 bankruptcy from a credit report whereas it might only take three to four years to remove a Chapter 13 bankruptcy. Other things that might slow down the bankruptcy process is if you get fired from a job, have a divorce, or are unable to find a job. If you file for bankruptcy and are unable to get a job, this can also affect your ability to use a bankruptcy to buy a home.

Freeze Your Credit

Having credit that is "frozen" or closed requires no action on your part. Each time you buy on a credit card or open an account, this allows the card issuer to place a hold on your account for up to 90 days. That means they will not let you open new accounts unless you can prove necessary expenses. Once it is "frozen" it is usually at least six months before this type of credit report can be unfrozen again. This gives plenty of time for any delinquent accounts to be paid. This time is much less than if approval for a new card is contingent on the fact that the applicant can prove needed expenses.

Closing Your Credit Card

If a credit card is closed, when this occurs the account is closed. The card company cannot allow you to open another credit card for up to five years or place restrictions on administering a new credit card account. When this happens, the cardholder must call the closed card company and request that the closed card company restores the credit card. Some companies will do this, but some will not. The requirement is typically for the cardholder to have a new account opened and that the cardholder prove their need for the credit after the card was closed. For example, if a young student needed access to a credit card to fund a computer project, the issuing company might agree to this. Credit card companies do not want to limit their clients' ability to borrow.

Don't Be Late

This problem occurs after lenders closed your account. It is actually a good thing. These statements are true, but less so. A credit report lists most late bill payments and if the said loans were late by 30 days or more, the report will list them. A credit card which is "closed due to non-payment" doesn't help much. You still owe the debt, and if you can't pay it, it will be reported as a late payment. If the account was seriously delinquent, you might be faced with a lawsuit. In this case, the lenders will be more likely to obtain a judgment. Sometimes they will execute a sheriff's sale and have you arrested. The problem with a judgment is that all of your wages during the duration of the lawsuit are garnished. Ask the lender if they can fix it immediately, or close the account and do so only if you can prove useful to them as an account customer. By this time, even a credit worthy co-borrower can be denied credit if they show up on your credit report.

If you want to close the account, request the lender to list all outstanding obligations and their respective balances. From this, you can easily decide which card should be closed. Credit ratings and scores are not as pertinent to a credit line as being able to pay the bills in a timely manner is. Be sure to contact the lender and caused a hardship that will prevent you from making payments on the debt. This would be a good reason to set up automatic payments. If you become unemployed or are unable to work, request a forbearance agreement so your credit history will not be damaged.

The easiest is to simply pay your bills, but that is not always a viable option. Many people look for a way to find extra money to pay more than the minimum payment required. As long as the minimum payment is not adversely affecting your credit score, it is financially citizens' punishment to happen. What you can do is max outsource debt, including your bills.

People are generally apprehensive about doing this, but it hardly cost anything and is relatively easy to accomplish.

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What To Know About Credit Reports

What is a Credit Report?

Credit reports are referred to as "reimbursement reports" or "credit history" or "credit reputation". In some cases, it can also be called a "Consumer Report".

Your credit history is used for many purposes:

The credit report is a history of all of your credit-buying and spending behaviors. It will show you were you spend your money, pay off your former loans and open new loans. It will show how much you have been charged on all of your old loans and deposited in your checking and savings accounts. It will also show your credit limits on loans, whether or not you used the full loan amount, and if the account was paid on time. The report will also show credit card companies, stores and other companies who have reviewed your report to check on your creditworthiness before and after you opened/cashed your account.

Could you be penalized for paying off your credit card?

There are several reasons you could be penalized for paying off your credit card. If you have credit card debt, it becomes a part of your credit history. If you pay off a credit card, it is no longer included in your credit history. Paying off a credit card brings your debt to zero. If you decide to include your credit card balance in a consolidation loan, then the balance on your card is brought to zero and will not change even if you use the consolidation loan to pay off your debts. If you never use your credit card again, then the credit line could stay the same. It is important that you make your payments on time. If you miss a payment or are a few days late and are still penalized, decide to include your payment as part of the loan so that the balance if you decide to do it yourselves.

What is negative information on my credit report?

Any information that is negative is listed on your credit report. These may include late payments and some balances. Large balances may be listed for a chunk of time each month. If you have certain negative accounts, you may not be able to get additional credit for several years. An aim to improve your credit score is generally accepted if you are at least making the minimum required payment on your accounts. If you are late on any bill, you will receive a letter from the creditor and it will include information on the late payment. It will also include the amount of the late payment and a brief explanation of the late payments. If there are other reasons for late payments, a brief explanation for each may be included. Such explanations are as follows, overdue payment: you were thirty days or more overdue on your accounts. Overdue test is 30 to 60 days overdue on your account and your accounts have not been paid as of the may be due. Most creditors have the ability to give you sixty days grace. You may still be able to obtain credit while you take your financial plan and do your obligation for 6 months. If you need credit during the grace period, many creditors will accept it. This is a very common situation. However, if you pay late over the years you will most likely receive a credit report. If this occurs, it will most likely not cause you further credit problems until you decide to make another late payment.

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How The Scoring System Affects Your Life

 

Your credit score is a three digit number between 300 and 850 as a reflection of you and your financial dependability. Credit scores range from 350-800, with the later being the worst. The higher your number, the more likely you are to pay your bills on time, not taking advantage of every opportunity to borrow money, have credit, or receive credit from other sources. exclusively situations such as bankruptcy or tax liens. On the other hand, with a low number, you may prefer them to home loans, vehicle loans, or any other credit. lowest established ones are mostly existent because the credit bureaus do not have enough information to rate people effectively enough. When your credit is good to excellent, you usually receive many credit card offers. One of those credit offers will be accepted.

Understanding Your Credit Score

It sounds simple, but how do you know where you stand with your credit? This score puts you into the appropriate range of what lenders, banks, or credit card companies consider to be risk for default. Knowing whether your credit score is good or not usually involves checking in with a credit score reporting agency (CRA.) The CRA gathers information about your financial history and creates a score. This score is a tool used by these companies to determine how much of a credit risk you will be. Obviously, the higher the risk, the less chances of getting credit. Consumers usually have a fairly good idea of how they generally stand as a credit risk, anyway. Thus, checking them is a good way to see if you can boost your credit score.

If your score is low, don't worry. By using common sense, following a budget, and working on paying of your debt, you should be able to boost your score. Of course, having a budget will help too. It's crucial to your financial success. It's like a roadmap to your financial destination. As the score gets worse, the more likely you will miss out on important things such as better loans with good terms or lower interest rates. When this does happen, it's important to know about and cope with how it's affecting you before it gets out of hand, and then it becomes a hopeless situation. Finally, you must acknowledge that it is not the credit that's bad, it's your debt, and you can get back on track by paying off your debts.

Credit scores affect transactions from loans to employment. Credit utilization rate is calculated as a ratio (utilization rate/credit limit) which is a tool in a computer to give you a number that is a percentage of your credit limit taken by you. The credit utilization rate is looked at to find the average and not just the individual account that you happen to open and on how many times you used that credit for others. This causes a higher utilization which shouldn't occur and therefore an increase on your credit score.

There are several factors that affect your credit score, but the most important for you to understand is this one: The credit score keeps track of the impact of your past credit behavior. The longer your credit history, the higher score you get. The more recent your credit history, the higher score it gets. The score is affected negatively when your accounts go into delinquency or are unused for a long period of time. Credit cards especially will affect your credit score the most. The more you use your cards, the lower your score.

On the other hand, making small payments to creditors, your score goes down. Finally your utilization rate is 100%. That means that if you have a credit limit of $10,000 on your credit card and you made a $2,000 payment the previous month and now you have a $10,000 credit limit, you have made $2,000 worth of consumption.

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How To Fix Credit Report Errors

 

The law allows you to obtain a free copy of credit report from the lenders three major credit reporting agencies: Experian, Equifax and Trans Union. Before you request a credit report, there are a number of things that must be in order. As a credit consumer, you have the right to complain about what's in your credit report and there are a number of ways that you can order a copy of it.

You are entitled to get a copy of your credit report, under the following conditions: you have been denied credit because of the content of your report; you believe your report is inaccurate because of fraud; or you want to make sure the information matters so that the person attempting to extend credit to you sees it the right way. When you request your report, there may be a charge involved, but the charge is usually less than $10.

When you get your report, take an honest look at it. It may not be a problem if your credit is good or bad, but for those with bad credit, they can find many errors on their credit report. You should examine your report and figure out if there are any errors. If there are, you should have them checked out simply because the errors might or may not be down to you. One possibility is that the debt you're trying to pay may not be showing. Another possibility is that you may have been able to pay your bills, but the amounts may not show that you have actually paid the bill. Some credit cards and loan companies notify credit bureaus if payments are made late so, if you're three months behind on your car loan, they can raise your rate because of the delay in payments. If the report is correct, when you correct your report, there shouldn't be any problems. If your credit is bad enough that you don't qualify for credit card or loan companies to extend credit to you, there are solutions. You can get a secured credit card and pay the money back as soon as you can, or you can get a loan from a bank or a lender that reports to all three credit bureaus so that you can begin to improve your credit. You should get several smaller credit accounts reporting on your credit report if you can. This is necessary for as long as you carry over your receivables, and it shows that you are making payments so you can get a regular credit card in the future. If you your credit is poor, some banks will avoid you and lend you money or close your accounts. These banks will report your credit to the bureaus, but it is up to you to obtain the credit and make the payments. If you could get a credit card, loan, or charge account and make the payments on time, you would be a much better credit risk. All lenders want to make sure they are going to get their money back, so you can apply for as many credit cards, loans, or charge accounts as you want. In the end, though, your credit report may be marred by non payments and late payments, but that is not the point of the credit report. If you pay everything on time, your credit report should improve over time.  An important factor in getting credit is the income the prospective spouse earns, and also the income of both spouses. If the prospective spouse earns more than the average family in their income bracket, there may be some problems. This is approximately 80% of the income to apply for most credit. For purposes of this guide, we're only discussing the income that a young couple may bring in together if both the prospectives work.

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How to Deal with Credit Score

A credit score is a numerical performance that is a measurement of your credit worthiness. It makes up part of your credit report and credit rating that creditors and lenders look at before extending credit to you. Your credit report contains detailed information about your financial history. It contains information about you. It contains who you owe and what you owe. It contains information about your employment and any public records that may affect your credit history. It includes details about your driving history and whether you have ever been the victim of identity theft. Credit lenders use this information to determine if a customer will be a credit risk to them. What is in your credit report is a concise picture of your credit history. With that information, they can come up with a credit score or credit rating for you.

 

Read the Fair Credit Reporting Act and contact both the consumer reporting agencies and the business that provided the information. You have the right that the information on your credit report is accurate and should not cause you any harm. Consumer reporting agencies must correct inaccurate and incomplete information in your credit report. They are required by law to do so if you dispute the information. Because of this, it is to the consumer's interest that the agencies verify an account as soon as they receive your request. If they cannot or do not, they must change the information to what you request. Write your dispute letter and send it to the agency. Make sure you send it return receipt requested so you will have documentation that they received it. By law, they must investigate the dispute within 30 days. If the agency finds that the information was not verified then they must remove it from your report. They do this by contacting the creditor and request that the information be removed. If the creditor does not respond within a reasonable period of time then the disputed account must be deleted. This is an important part of the process.  If you do not receive a reply within the 30 days then the bad credit information must be removed from your report.

If you are working on improving your credit and you want to add a credit item that would affect your credit score then you can add a statement of this type to your credit report.This will indicate that you disputes the information as being false and or they may take steps to verify it. Close any accounts that don't have a balance and which are less than half of your credit limit. If you have a credit card with a $50,000 spending limit and you have only a $10,000 balance on the card then you are using 90% of your spending and therefore have a higher debt to credit ratio. Also, make sure that your credit limits are well within your financial ability. Overwriting your credit limits may lower your credit score. Limit the amount of information in your credit file. Do not have credit cards or other easy access to funds.  Do not apply for more credit than you can comfortably handle. 

 

Keeping a good credit score is a simple thing.  But you can't do it without being proactive.

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Advantages of Having a Good Business Credit Rating

A business credit report provides basic information to help businesses run efficiently. Credit risk management is a program offered by many serious credit report companies that will help make sure a business doesn't suffer financial ruin if a potential customer defaults on its accounts. 

Obtaining credit can help an entrepreneur secure an independent identity. By getting a business credit report before exclusive agreement with a customer, an entrepreneur can use credit reports as a guide to establishing business credit lines to be used for the company's own unique purposes. If a company is experiencing financial difficulties or requires an immediate expansion of its operations, it can also use a business credit report as a way to secure enough money in advance to help prevent bankruptcy. It is when a business has encountered major financial problems and needs to expand or improve its operations that companies begin leasing more cash to keep their businesses running smoothly. By getting a business credit report early on, a business can make sure it will have the credit rating it needs to effectively operate in the future. In addition to that, business credit reports can help a business determine the amount of debt or credit it can obtain for a new account.

A business' credit rating can qualify or disqualify a firm from a number of accounts, such as accounts receivable, accounts payable, and accounts payable. In addition to that, within a 30 day period, a business credit report can show information related to new accounts and who has recently opened the accounts. When a business decides to secure a bank loan, the bank or lending institution will need a basic business credit report to help verify your particular business is a good credit risk. A business credit report is necessary when applying for a bank loan, and if your business credit report shows a poor history of payment, it could cause your application to be denied. If a company needs to secure a line of credit or advance funds, a business credit report will help a business to determine in advance whether lenders will grant the loan or account.

Since business credit reports are so important, a business has to determine how important it is to them. If a business has just began a new endeavor and maintain a poor credit score, the business would be fired from the responsibility of a line of credit, and possibly having to pay back a business credit report fee. A business needs to acquire a business credit report and find out if a loan or line of credit is feasible before it achieves financial stability. Lenders may consider extending a line of credit to a business that has a poor credit score, but the interest rates and limits may be rather high.

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7 Tips For Credit Repair

If you're reading this article, then you likely have a copy of your credit report. If so, remember that we recommend that you obtain a copy of your credit report at least once a year. We recommend that you check your credit report at least every six months since errors are common and be prepared to take further action, if necessary.

Below are a number of tips that can help you repair your credit if there is an error reported on the report. It's important to repair errors as soon as possible so that your credit rating can be seen as a positive, and thus worthy, factor in every loan you apply for.

• Check the report for inaccuracies. If you find information that doesn't fit your life, such as accounts you didn't open, balance information that is incorrect, or payments you never received, check your credit report for inaccuracies. Report errors by contacting the responsible credit reporting agency immediately.

• Always pay under the minimum due when it becomes due. It's always a good idea to pay your bills so that you don’t become late, but it can be a good idea to pay larger debts so that your payments will be posted to your credit report promptly and on time.

• Use a secured credit card. When you request your credit card, you will also gain a credit card number, and, shortly afterward, you will begin to see a small but constant line of available credit on your account.

• Begin re-establishing credit by requesting a small loan from your credit union or banker. If you use the card responsibly over a two-year period, you will regain the ability to qualify for larger loans.

• Request small loans start with debt consolidation. Home equity loans can come in handy when you are ready to make a large purchase like a car, and you may be eligible for tax credits against the interest you pay on your home equity loan.

• Ask your employer if there is a no-credit check clause in your employment contract. When you are working for someone for a particular employer, they may not check your credit unless you are fired first for unpaid credit. This also protects you from identity theft if you have accounts under your name, and while a valid credit report often identifies you, it may not always do so for Federal and State taxes.

• Have a relative or friend add you to their credit card account. Though it is not really advisable, it is always a good idea to add someone to an account as an authorized or joint user if they maintain a good repayment history. Generally, however, only income has to be present on the account and it must be current. Everybody has participated in something that has gone on a "charge" date from an authorized party. Once you can establish credit to a fair extent, you will further improve your odds of obtaining credit. If a friend or relative cannot help you this way, a secured credit card can get you started. As your credit rating improves, you will be able to open more accounts or voluntarily make larger parameters of your credit limit.
  

By practicing a measure such as the above, you can easily develop and maintain a good credit report. With a sound financial plan, and by being an conscientious and considerate person, there is nothing that you cannot accomplish.

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Important Things To Know About Business Credit Card

Business cardholders also earn incentives, travel bonuses, and savings. These financial benefits may also encourage small business growth. Where businesses normally deal with customers' credit card payments, these cards can make these expenses immediately affordable. Of course, this is only as a temporary measure and once balances have been paid off, credit card payments will no longer be necessary. So what's the catch?

Creditors want their funds back on time. In an unstable economy, lenders have to be extra careful who they lend to because of the potential for defaults. Since businesses are unable to pay loan obligations on time, lenders will charge and add fees and finance charges for every day that a loan is unpaid. If you want a business credit card, understand that business cards usually have higher interest rates. Lenders often base the interest rates on the risk they have to incur as opposed to the interest rate of the credit card itself. Credit cards for businesses often have variable interest rates. These rates tend to fluctuate depending on market trends and the variables associated with the card. Since businesses generally pay interest much like the individual consumer, not paying on time may result in financial charges. Most times, payment errors are allowed. If discovered, lenders may forgive the error and only press charges if the error continues.

Before you apply for a business credit card, you want to be sure that it fits your company's needs. If you need a balance card and your card's rates increases when your company grows, it may not be appropriate for your company. You also want to think about how you will use the card and settle it quickly because you don't want your business spending more than they can afford. To achieve the best results with credit cards for businesses, primarily look for the extension is up to date, free from hidden costs and exclusive to their business. Decide the kind of rewards you can get from these financial instruments.

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Major Errors To Check On Your Credit Report

 

Your credit report contains personal information about you including your name, address, social security number, employer, phone number and previous addresses you have had. It also contains information that is chalked on your credit history like how many times you have been 30, 60 or 90 days late with your bill payments, if loans have been given to you and, if you file for bankruptcy. Any bankruptcy filing or a foreclosure, or a judgment against you is listed in your credit report. Lenders see these and decide if they want to risk lending to you.

It is important to make sure that errors in reporting do not occur and if they are discovered get them corrected immediately. The FTC recommends that you check your credit report at least every six months, if not more frequently. To protect yourself from identity theft if you are a victim contact your credit card companies and your bank and report the fraud immediately. If you do not report the theft or error to the company first then your identity may be stolen. If you are lucky the theft will not be as big as it could have been and you will not have to sweat it too much either. Identity thieves buy information about you through the internet. A lot of the stolen information they want is your credit card number, not the number itself. Taking advantage of this way is one of the areas where identity thieves flourish. Your credit cards, if you have them, can easily double as stolen credit accounts.

Another thing you should watch out for if you have a problem with identity theft is anyone trying to get a copy of your credit report. You have a freedom of it, but you should make three attempts at getting your annual credit report and a credit score. There are legitimate reasons for doing this, and you have the distinct advantage if you remember to get a copy of your report every year or as long as you have valid reasons for needing a copy. If you get an original copy of your credit report and you know it is free you should not even bother getting one of the other copies. If you do get a copy you may get a false report of your activities. This way companies cannot give credit to anyone who has never gotten credit before. They could easily give you a false report of an old telephone bill.

If you are worried about your credit report you can get help from a credit repair company. They will do the work for you. As opposed to doing it yourself you should make sure that the company you hire can offer you a step by step easy to follow manual on how to get the information accurate on your report and boost your credit score.

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How To Manage Your Credit

Credit experts estimate the average American's debt at $8,000, and this is a scary figure. If you pay off $8,000 in credit card debt in a year or would like to, say that this is a good trade off for having a high credit score. So when you're juggling a few bills each month and beyond that with monthly student loans, everyone gets noticed.

The number one killer of your credit score are credit checks. Every time you apply for an loan or credit, the lender will make an inquiry to the credit bureaus. If too many of these are hit or matched, it will cause an inquiry and drop your credit score, especially if done from multiple lenders. Part of your credit score depends on how many inquiries are done, so just because you get one does not mean you are safe from getting denied. This is especially common in the mortgage industry so make sure you don't give a reason at the time of the credit check to justify the rejection of your loan, as this may hurt your score as well. Applicants with insufficient credit are normally denied a loan. This includes car loans, mortgages and credit cards. It is suggested you try to have a good standing on your credit before attempting to get a loan. Should you be denied on your application, you can always appeal to the lender. The request has a 45 day deadline. The denial, however, should be finalized within 30 days. It is always advisable to contact the lender for a reason, rather than simply denying you application.

Another way to manage your credit is to establish good credit. The best way to do this is to pay bills regularly and keep your debt to available amount low. It is almost always cheaper to carry a balance rather than paying in full, and this can be done by buying things like the house or a car. The more credit extended to you, the more you can spend. You will most probably only be able to get a loan if your credit rating is good, and this is where the money saving begin.

If you own a home, or if you have a credit card, or if you have a savings account, chances are you are making your payments every week or every month. You should never be late on these. These are essential to your credit. Your credit report will know if you are living within your means and are budgeting your money. If you're living beyond your means, you need to make changes. Cut back any excess budget and free up more money to pay these bills.

In order to keep your scoring good, consider getting a credit card to use wisely. There are some excellent cards that can give you points if used wisely. Pushing these points will help you from getting disqualified due to missed payments. Make sure that you know how to pay this bill before you spend any money. You should buy things that you can afford, and not make purchases just because of the rewards program. You will need to keep your balance low to push the point, and you should make the full payment. If you maintain this over a period of time, you can be on your way for a healthy credit score.

 

Know when your time to use your card is. You should know when you have 30 days to pay off a certain bill. You should also know the due date of your bill and when you need the payment in. If you don't have this information, card companies will hold onto your money.

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Simple Tips For Credit Repair

Have a diverse range of credit - equity loans, auto loans, student's loans, etc. - and use each of them responsibly. To give credit its due, a credit score will not rise dramatically over time, regardless of how much credit you obtain. For therefore long, use each of your credit accounts every month, but always pay off the balance in full. If applicable, open a checking and savings account with each of the three credit agencies. Hold a job that is within your field and have a bank account with a financial institution such as Chase or Citi. This will help you to build such afolioof credit accounts that lenders will look at to determine your score.

Review and balance your credit accounts every six months. Keeping up with the latest information about your credit accounts is imperative. Most creditors will send you an updated report every quarter. These standard reports will not include your score. You can purchase the reports that will include your score. If you decide to get the scores, look in the section about credit scores, as it is usually one space bar your score.

Pay all bills online. In this day in age, payments can easily be made using a computer. Another option is to make your payments on-line. Paying bills this way is not as complicated or costly as it is when making payments by check or phone. The benefit with this is that it is quicker to find out if a payment has been posted when using the postal service. Paying bills online can also save you a lot of time in your checking account.

You need not have a huge balance on each credit card when going for each of the three credit accounts. Although you may only carry a small balance on one account, it is critical to maintain several low balance active accounts. Loose interactive money is the way to go. Credit cards are better used on extended amounting days. There is no reason to carry a high balance on the card when examined over time.

Talking to lenders about your situation is the first step in the credit repair process. Lenders that you are able to talk to will typically be able to offer you an interest rate deduction. Even if it is a relatively small decrease, over time it can have a significant impact on your credit score. Paying off your debt and your payment are key in the credit repair process. Credit cards can be one of the best ways to free up some cash. For instance, making payments on time can significantly improve your credit score; however, do not rely on this to fix everything. So, make sure you have a long credit history before you rely on a card. This is bruised credit. With time, the effects of blemished credit will not do you much good. And, with most lenders needing to see 6 months of use before they have a trust worthy application, you will want to demonstrate your compliance first. To speed up the process, you should never cancel any cards that you are paying off or having a card in collection.

Pay off your bills, pay off your debt. By taking this approach, you will be surprised at how quickly your credit score will progress. Who knows how many other creditors will be able to look at your credit score, and consequently if they will want to lend money to you.

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3 Things That Determines Your Credit Score

 

A creditor may look at the average daily balance on each card as one of the three pieces of the puzzle that determines your credit score. Knowing your credit utilization gives you the information to use the other two pieces of the puzzle in getting the best possible credit score.

This is the first piece of the puzzle. Knowing your credit utilization is important if you want to get the best possible credit score. Having a high utilization puts you in a high-risk category, which is not attractive to most creditors. Credit utilization is calculated by dividing the account balance by the credit limit, which is the maximum amount of credit you have from the creditor. For instance, let’s say your total available credit is $10,000 on each card and your balance is $8,000 on one card and $4,000 on another card. To calculate, take the balance of $8,000 by the $10,000 credit limit for each card, then divide it by whichever card has a higher interest rate. The resulting number is your credit utilization, which would be one-third or 30%. Using the same math, we calculate the same balance of $4,000 by the $8,000 credit limit for the first card and $4,000 by the $10,000 credit limit for the second card. Since the balance for the second card is lower than the balance on the first, it would be 30% in our example. The third card would have a utilization of only 20% in this case.

The second piece of the puzzle is your credit history. If you tend to be making late payments to creditors, or if you never seem to have any revolving credit, then you’re likely to have a low credit score. Paying your bills on time is great, but you should also try to have as much credit open as possible. The more credit you have, the better. Having a large amount of credit might leave you with a lower score. 10, 20, or 30 percent of the credit available to you is usually sufficient to have a higher credit score.

Review your credit reports from all three of the major credit reporting agencies at least twice a year. Your credit reports do not always contain credits payments. However, if there are any disputes or errors in the credit reports, the consumer must conduct thorough and ongoing work to correct the errors and raise the credit score. Dispute resolution is an ongoing process.

The third piece of the puzzle is your credit ratio. This is calculated by dividing the balance of your outstanding credit accounts by your credit limit on those accounts. For example, if you have a $10,000 limit on your outstanding credit, and your balance is $5,000, then your ratio is 50%. Although you might not want that level, unrealistically high debt will lower your credit score. Prep avail of the services from your local credit repair or debt management company.

Understanding the credit score can be challenging if you don't understand how the numbers are derived. Use the free online resources, such as news articles, company and consumer websites, and help from your local credit repair or debt management counselors.

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Basic Tips To Improve Your Credit Score

 

There are so many aspects to credit scoring. Here is a basic list of some tips that can help improve your credit score: 

• Make a note of all special interests you owe. If you have been heavy on your budget lately, you might want to take note of potential credit card companies that might be willing to lower your interest rates if you sign up for their cards. Once again, it is important to be in the habit of details. If it is going to have a negative impact on your score, it will not be beneficial to you now or later. 
• Always follow your budget too.  Do not simply turn your back on the situation. Doing this would be like putting on weight and socking away your groceries on your budget. Doing this also implies an element of control, which is a MUST. 
• Keep your debt to a minimum.  If what you owe on your credit cards or lines of credit is too overwhelming, do not carry a ridiculous balance. Keep your credit card balances at less than 30% of your spending limits. This is an excellent way to improve your creditworthiness in the eyes of creditors. 
• Dispute inaccuracies on your credit report. The procedure to "self- authenticate" is not very user-friendly. When you find inaccuracies, you are expected to contact the credit agency to dispute them. Most credit agencies allow 90 days to make the necessary changes before checking credit reports again. If you are disputing your report, this period extends beyond 30 days.  A small amount of time off from monitoring your report should not have a negative impact on you and your score considering you disputed the errors. 
• Decrease the ratio of your debt to your credit limits.  This means you need to make the maximum payment every month possible. When you have low balances this improves your credit to debt ratio, which is very important for credit scores.
• Do not make late payments. This will cause negative information to appear on your credit report. Making late payments will seriously knock your score down.  If possible, set up automatic payments for your bills.  People pay their bills automatically every month and are often times more mindful of their spending.
  

There is an extensive amount of information on credit scores, as there are on credit reports and consumer reports. While building your credit score is a time consuming process, it is not impossible. Whether you use a credit repair firm or do it yourself, with a little time and patience the process can be a success.

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Tips To Improve Your Credit Score

First of all, obtain a copy of your credit report to see where you need to focus your efforts for improving your credit rating. You are entitled to one free copy each year after which you will be charged. However, you might be able to obtain your report at no charge if you meet certain criteria. Once you have the credit report, you will need to review it to determine the areas where you can improve your score.

It's important to first identify what your credit score is made up of. Here is a breakdown: 35% is based on your payment history; 30% is based on your balances, both secured and unsecured; 15% is based on your credit history; 10% is based on the types of credit you have; and 10% is based on your inquiries. It's important to realize that if you have a high credit score, in order to maintain it, you must not only pay your bills on time, but you must also limit your applications for new credit. However, if you are already having problems with your credit rating, you needn't worry as there are steps you can take to raise your credit score.

Go over your report in detail to determine areas to improve. One important step you can take in improving your score is increasing your total credit line. You can accomplish this by applying for a new processing account that reports to all three major credit bureaus. Your score will improve noticeably with an increase in your overall credit limit. Another step you can take is to pay down any credit cards you have to lower the amount of debt you have.

Remember that improving your credit score doesn't happen over night. Some experts say you might need to put in at least a year into repairing your credit before you can expect a significant improvement. However, there are steps you can take over time and by using a budget you can implement a plan to pay off your indebtedness.

One warning to avoid when trying to improve your credit rating is to be certain not to fall for any old get rich quick schemes or credit repair scams. Unfortunately, there are many companies out there who will claim that they will create an amazing new credit history for you. Do not fall for these programs because they will waste your time and money. A lot of these credit repair programs can be quite costly which is why they have been dwindling in popularity.

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