| 1. GET RID OF YOUR COLLECTION ACCOUNTS. | | | | 30% of your balance.o In order to maximize your |
| Did you know that paying a collection account can | | | | score without having to pay down your balances, |
| actually reduce your score? Here's why: creditscoring | | | | evenly distributeyour credit card balances among all of |
| software reviews credit reports for each account's | | | | your credit cards, rather than carry a large balance on |
| date of last activity to determine theimpact it will have | | | | onecredit card. For example, if you are carrying a |
| on the overall credit score. When payment is made on | | | | $9000 balance on a credit card with a $10,000 limit, and |
| a collection account,collection agencies update credit | | | | you have two other credit cards with a $3000 and |
| bureaus to reflect the account status as "Paid | | | | $5000 limit, transfer your balances so that you have a |
| Collection". Whenthis happens; the date of last activity | | | | $1500 balance on the $3000 limit card, a $2500 |
| becomes more recent. Since the guideline for credit | | | | balance on the $5000 limit card and a $5000 balance |
| scoringsoftware is the date of last activity, recent | | | | on the $10,000 limit card. Evenly distributing your |
| payment on a collection account damages the | | | | balances will maximize your score. |
| creditscore more severely. This method of credit | | | | 6. DO NOT CLOSE YOUR CREDIT CARDS. |
| scoring may seem unfair, but it is something that | | | | Closing a credit card can hurt your credit score, since |
| mustbe worked around when trying to maximize your | | | | doing so effects your debt to availablecredit ratio. For |
| score. How is it possible to pay a collection | | | | example, if you owe a total credit card debt of $10,000 |
| andmaximize your score? We can help you negotiate | | | | and your total creditavailable is $20,000, you are using |
| with the collection company's and maximize your | | | | 50% of your total credit. If you close a credit card with |
| score, by removing all references to a collection | | | | a |
| account completely which will increase your score. | | | | $5,000 credit limit, you will reduce your credit available |
| 2. GET RID OF YOUR PAST DUE ACCOUNTS. | | | | to $15,000 and change your ratio to using |
| Within the delinquent accounts on your credit report, | | | | 66% of your credit. There are caveats to this rule: if |
| there is a column called "Past Due". Creditscore | | | | the account was opened within the past twoyears or |
| software penalizes you for keeping accounts past | | | | if you have over six credit cards. The magic number |
| due, so Past Dues destroy a credit score. | | | | of credit card accounts to have inorder to maximize |
| If you see an amount in this column, pay the creditor | | | | your score is between 3 and 5 (although having more |
| the past due amount reported. | | | | will not significantlydamage your score). For example, if |
| 3. GET RID OF YOUR CHARGEOFFS AND LIENS. | | | | a card was opened within the past two years and you |
| Charge-offs and liens do not affect your credit score | | | | haveover six credit cards, you may close that account. |
| when older than 24 months. Therefore,paying an older | | | | If you have more than six department storecards, |
| charge-off or a lien will neither help nor damage your | | | | close the newest accounts. Otherwise, do not close |
| credit score. Charge-offsand liens within the past 24 | | | | any at all. |
| months severely damage your credit score. If you | | | | 7. KEEP YOUR OLD CREDIT CARDS ACTIVE. |
| have both charged-off accounts and collection | | | | 15% of your credit score is determined by the age of |
| accounts, but limited funds available, pay the past due | | | | the credit file. Fair Isaac's credit scoringsoftware |
| balances first. | | | | assumes people who have had credit for a longer |
| 4. GET RID OF YOUR LATE PAYMENTS. | | | | time are at less risk of defaulting onpayments. |
| When you make the decision to retain FiCODOC we | | | | Therefore, even if your old credit cards have horrible |
| fight with the creditors and bureaus to delete the late | | | | interest rates, closing thosecards will decrease the |
| payments on your credit report. Be aware that one 30 | | | | average length of time you've had credit. Use the old |
| day late on a car payment can drop your score by 70 | | | | card at least onceevery six months to avoid the |
| points or more. | | | | account rating to change to "Inactive". Keeping the |
| 5. CHECK YOUR CREDIT LIMIT(S) AND EVENLY | | | | card active is assimple as pumping gas or purchasing |
| DISTRIBUTE THE BALANCES YOU ARE | | | | groceries every few months, then paying the balance |
| CARRYING. | | | | down. |
| Make sure creditors report your credit limits to bureaus. | | | | An inactive account is ignored by Fair Isaac's credit |
| When no limit is reported, credit scoringsoftware | | | | scoring software, so you won't get the benefitof the |
| scores the account as though your current balance is | | | | positive payment history and low balance that card |
| "maxed-out". | | | | may have. The one thing all creditreports with scores |
| For example, if you know that you have a $10,000 limit | | | | over 800 have in common is a credit card that is |
| on your credit card, make sure that the limit appears | | | | twenty years old or older. |
| on the credit report. Otherwise, your score will be | | | | Hold onto those old cards trust me! Preparing credit is |
| damaged as severely as if you were carrying a | | | | a slow and time consuming process. |
| balance of the entire available credit. Credit scoring | | | | Full knowledge of your credit profile and how it |
| software likes to see you carry credit card balances | | | | represents you to creditors and credit bureaus ispivotal |
| as close to zero as possible. If it is difficult for you to | | | | to full credit restoration success. Credit bureaus |
| pay down your balances, read the following guidelines | | | | always advise individuals that they have aright to |
| to maximize your score as much as possible under | | | | dispute their own credit files, but when the rights of the |
| the circumstances:o There are different degrees that | | | | Credit Bureaus slow you down~you know where to |
| scoring software can impact your score when | | | | ask for help. |
| carrying creditcard balances.o Balances over 70% of | | | | In conclusion, you can repair your credit if you hire a |
| your total credit limit on any card damages your score | | | | pro and listen to his or her professional advice. |
| the most. The nextlevel is 50% of your balance, then | | | | |