| A bad credit score can affect so many different | | | | black marks, do NOT do this! First of all, it will set off a |
| areas of a person's life, and makes life far more | | | | red flag. If your requests get marked as frivolous, then |
| difficult than if you had a good credit score. A bad | | | | not only will legitimate problem accounts not be |
| credit score can lock you out of the best loans, best | | | | removed, but they can prevent you from challenging in |
| credit cards, best apartments, houses, and even jobs. | | | | the future. This means if you have a negative account |
| Because of this, repairing a bad credit report is | | | | that hits the 7 year mark and should therefore be |
| extremely important and should be taken on with all | | | | removed, but isn't, you have no way to get that black |
| the strength and gusto that can be mustered. | | | | mark removed even though by law that's your right. |
| The problem is that there is a lot of conflicting | | | | If there are one or two accounts you do question, do |
| information out there about how to repair your credit | | | | ask for evidence of these late charges. That's the key. |
| score, and some of this information is just flat out | | | | Don't categorically deny that this is your debt, but ask |
| wrong. Then you have the thousands of guys who | | | | for evidence. If the company doesn't respond in a |
| want your money before offering any information at | | | | timely manner, the challenged mark is removed. But |
| all, and outright scammers on top of that. The good | | | | never challenge more than one or two accounts at |
| news is that while there is no guarantee that every | | | | one time unless there is an actual concern of identity |
| person in the world can upgrade their credit score 'X' | | | | theft. |
| number of points in 'X' amount of days, for most | | | | Step #3: The Magic of 50% |
| consumers with bad credit in the low to mid 500s or | | | | One of the biggest factors of anybody's credit score, |
| even worse, there are definite ways you can repair | | | | and perhaps maybe the most underreported, is the |
| your damaged credit score quickly, and 120 points or | | | | "magic" of the 50% mark. A huge part of your credit |
| more isn't out of the question. | | | | score at any given time is amount of credit you're |
| Step #1: Stabilize! | | | | actually using as opposed to your total credit available. |
| Some of you might already have done this step, but | | | | So if you have $10,000 in total credit card limits, and |
| for those who haven't this is critical. Don't overpay all | | | | are using $9,000 of that, then you're using 90% of your |
| your credit card bills $20 a month when you have an | | | | credit, which is really bad. |
| old $150 bill sitting in collections. That doesn't make any | | | | That percentage is a huge factor in your credit score. |
| sense. The first part of quickly turning around your | | | | Everything above 50% is considered poor (and gets |
| credit score 120 points or more is to stabilize your | | | | worse the closer to your limit you get) while everything |
| current situation. | | | | below 50% is considered good and improves your |
| This means every single bill needs to be paid on time | | | | credit score. This is figured on BOTH an account by |
| every month. If you have bills that are 120 days or | | | | account basis, as well as total over all debt. So even if |
| more overdue, pay them or work out a payment plan | | | | your overall debt is too high to quickly pay under 50%, |
| to avoid those from going to collections. If your bills are | | | | you can still improve your credit score by paying |
| 90 days overdue, keep them from going 120. Same | | | | enough off several small credit cards to knock them all |
| process with bills that are 30 and 60 days overdue, | | | | below that seemingly magical 50% line. |
| and especially for bills that are late, but haven't hit that | | | | Credit score wise, it's better to pay $400 to three |
| 30 day mark where most get reported. | | | | small credit cards and get them all below 50% than to |
| Some credit bureaus have your history of on time (or | | | | pay $400 to a large credit card (say an $8,000 used |
| not) payments account for up to a third of your entire | | | | out of 10k available). You then will get extra points on |
| credit score. Even if you've been bad about this, | | | | your credit score for those three small credit cards |
| paying all your bills on time for even a few months | | | | that are under the 50% line. Eventually you want to get |
| after a long history of not can show immediate | | | | all your debt under this line, and once you do the effect |
| dividends for your credit score. On the other side, | | | | is immediately noticeable on your credit score. |
| getting hit with one 30 day overdue mark can drop | | | | Another way of accomplishing this if you don't have a |
| you 50 points or more in one hit. | | | | lot of money to ask for a higher credit limit from |
| Many other credit scores have the 30 day mark | | | | companies you have a good payment history with. If |
| account for up to one third of your credit score, so do | | | | you've missed payments, they won't agree, but if you |
| not let late bills hit this bench mark. Once you are | | | | have a good payment history, many will. You might |
| stabilized so you are at least paying all of your bills on | | | | owe $300 on a $500 credit card, but if your credit limit |
| time, add an extra penny to credit card bills, car loans, | | | | is bumped up to $800 then you're already under 50%. |
| mortgage loans, bank loans, or student loans. | | | | Not only does this help your score on that card, but it |
| This is my favorite trick for helping out the credit | | | | adds to your total credit, meaning you're filling up less |
| scores of really cash strapped consumers. Your credit | | | | of your total credit, as well. |
| score records if you pay on time and if you pay the | | | | Step #4: Not Falling for Myths and Using Common |
| minimum or pay more. You get more positive points on | | | | Sense |
| your credit score for paying more than the minimum, | | | | In the end, there is no trick for improving your credit |
| but most credit scores don't differentiate between | | | | score if you are going to keep charging and spending |
| whether you pay $100 a month extra, or one penny a | | | | more and more. The other advice to keep in mind is to |
| month extra. Those extra pennies can add a nice little | | | | avoid these common credit score myths: |
| boost to your credit score. | | | | 1. Closing an old credit card account helps you credit |
| Step #2: Check Your Credit Reports and Clean Them | | | | score. This is a myth. After paying off a credit card |
| Up! | | | | you want that account to stay open, especially for |
| Every consumer is entitled to one free credit report | | | | older cards since length of credit history is critical to |
| from each of the three major credit reporting bureaus | | | | your credit score. Pay off the card, but do not close |
| per year. Order all three and take a close look at them. | | | | the account. |
| A conservative estimate says that over 30% of all | | | | 2. A debt consolidation loan will help my credit score. |
| credit reports will have errors of some type on them. | | | | Actually, in the beginning this will hurt your score not |
| You will want to remove all the incorrect information | | | | only because of the addition of a large new loan, but |
| immediately, especially if you have a common name. It | | | | also because it indicates trouble with debt. In addition, |
| is not uncommon for someone else's information to | | | | many people will then use their credit cards, digging |
| appear on your account | | | | themselves into a hole yet again. Consolidation might |
| Have all incorrect information removed. For some | | | | help with paying off debt, but it does NOT improve |
| people, this action alone could result in a 120 point jump | | | | your credit score the majority of the time. |
| if someone else's negative information is on your | | | | 3. Common sense: stop using credit cards. You can't |
| account. Getting your credit reports to reflect on you | | | | improve your credit score while constantly adding to |
| specifically is the first step to fixing your credit score. | | | | your balance. It's just not possible, and anyone saying |
| There is a second part to this step, one that involves | | | | otherwise is trying to scam you. |
| advice given by many credit repair "experts" who give | | | | Follow these four steps, and you will be able to see a |
| the wrong advice (we'll correct the myth here). | | | | huge bounce in your credit score in a very short time, |
| Many will give advice to challenge every negative item | | | | even up 120 points or more. |
| on your account. Unless you only have one or two | | | | |