| While there is no magic formula for improving credit | | | | because FICO calculates debt to available credit and |
| scores, there are some highly effective proactive | | | | consolidation may negatively impact that calculation |
| steps you can take to restore excellent credit. Below | | | | and hurt your score. Additionally, never cancel a credit |
| are five proven ways to improve your credit score | | | | card--especially your older cards--because those |
| while developing sound financial practices at the same | | | | cards establish a longer credit history which is a factor |
| time. Repairing one's credit takes time, patience and | | | | in credit scores as well. Even if you do not use those |
| perseverance. Do not believe anyone that tells you | | | | cards keep them on your record to establish a |
| that your credit can be restored in a remarkably short | | | | long-term credit relationship, |
| time. Depending on your situation, credit repair can take | | | | 4. Use secured credit cards to rebuild credit history, |
| up to 18 months to complete. We find the average | | | | This option only applies if you have had a severe |
| time for effective credit repair ranges from 6 to 9 | | | | credit problem and cannot get a standard or regular |
| months. | | | | credit card. Secured cards are offered by a number |
| Your credit score is effected most heavily by recent | | | | of institutions. Typically, you deposit from $300 to |
| events and how much you owe in relation to your | | | | $2500 dollars into a savings account and, in return, the |
| income and available credit. The further away from | | | | issuing bank offers you a credit limit of from 80% to |
| now items appear on your credit report the less | | | | 120% of your security. From then on the account acts |
| weight they have on your credit score. With that in | | | | exactly like a credit card. One caution, be sure to use |
| mind, here are five proven strategies for improving | | | | the card very carefully and pay the bill promptly. |
| your credit score. | | | | Because the secured card issuers report payment |
| | | | activity monthly to all three major credit bureaus the |
| 1. Reduce your credit card debt now. Because 30% of | | | | secured card is a powerful way to improve your |
| your credit score depends on how much you owe in | | | | credit history and rebuild your credit score. Sure you |
| relation to both income and available credit, reducing | | | | will pay high fees and, if you carry a balance, higher |
| your credit card debt will go a long way in improving | | | | interest rates but this is a small price to pay to restore |
| your FICO score. If you have maxed out all of your | | | | your credit history. |
| credit cards the impact on your score is significant. If | | | | 5. Seek out Credit Repair Professionals. While it is |
| you are maxed out on your credit cards, perhaps it is | | | | absolutely true that the credit repair company does |
| time to think of more ways than merely repairing your | | | | nothing that you cannot do for yourself, they will do it |
| credit to rebuild your financial future. In order to | | | | faster and better because that is what they do. But, |
| effectively reduce credit card debt you may want to | | | | be very careful. There are credit repair scams that |
| prioritize your payments by paying down one card at a | | | | promise the moon, often by suggesting practices that |
| time and then moving to the next one. Be careful to | | | | are illegal. What makes the credit repair specialist so |
| make the minimum payments on all other cards. | | | | important, however, is that they engage in systematic |
| 2. Pay ALL of your bills on time. While this may seem | | | | and emotionally detached efforts to help restore your |
| line a no-brainer, missing reported payments by 30 | | | | credit. I think about the whole thing like this--I could fix |
| days sends up red flags across your credit report. | | | | the leaky pipes in my basement by going to the supply |
| Since credit scores are weighted toward the most | | | | store and purchasing the right materials and tools, read |
| recent credit behavior, establishing or reestablishing a | | | | the book on how to fix the leaky pipes, and do it |
| history of prompt payments goes a long way to | | | | myself and I might even do a really good job in the |
| improve your score. | | | | end--but I call the plumber because the plumber knows |
| 3. Use extreme care when using credit cards. Again, a | | | | what he is doing and I am assured that the job will be |
| no-brainer but it is sound financial advice no matter | | | | done right the first time or I call him back to correct the |
| what your current credit status. Using credit cards | | | | problem. Sure there are disreputable plumbers but if I |
| wisely, that is to pay for important items but not | | | | have done my homework I can most likely avoid the |
| current expenses, is a powerful way to increase your | | | | scam. |
| credit score. You may want to consolidate your credit | | | | These five ideas will go a long way in rebuilding your |
| card debt into one card. This tactic may backfire | | | | FICO credit score. |