Fix Credit Report – Repair Boost Score Ratings

Jobo Smith asked:




Everywhere you look in the news today, its always more and more bad news about the credit markets. It is very hard for even people with a decent credit score to get a loan, much less anyone with a score below 650. It used to be easy, now its hard. Everyone can boost their score, it just takes a small amount of work.

The first thing everyone should be doing in this day and age is subscribing to some kind of credit monitoring service. All the 3 main credit bureaus all offer this service, as well as many third party providers. Just type in “credit monitoring” into google and you will get a huge list. But be careful – there are tons of scam artists out there who are looking to steal your information. If you dont go with one of the 3 credit companies (Experian, TransUnion, Equifax), make sure you know and trust the company you are going to give your information to. One additional source here is your credit card company. Most of them now will monitor for you for a yearly fee. The main reason for this is to find out in real time when changes are made on your credit report. It is far far easier to fix something in real time than to find out 2 months or more down the line when a past due bill notice comes in the mail for an account you never opened.

Once this is done, they will send you a copy of your credit report. Check every line, make sure every bit of detail on that report is accurate. If you find something that does not look right, you can usually call the credit bureau and inquire for more information. If something is not right, make sure you also check with the other 2 major credit companies as well, order a copy of your report. Sometimes the error or (fraud) is uniform across all 3, sometimes not.

Either way if you detect any irregularities that would indicate some type of fraud, you have to check all 3 and alert them. If you find there is a fraudulent account that has been opened in your name, often times you will also need to report this to the local police or FBI depending on what has occurred. The representative from the credit agency will be able to tell you if a report needs to be made. One side tip – if someone fraudulently opened an account at a department store or somewhere else that you do frequent but don’t have an account with – do not shop there using credit of any kind while the investigation is going on. If you must use cash. Its harder to prove it was not you if you are actually going there and spending money with another credit card while the investigation is going on – its not illegal or anything, but just a tip to keep it simple.

Assuming you have actually checked your report, fixed (or there are no) problems, now its time to boost the score. I will list a few here, there are of course many, many more.

The first big one that most people dont know is to look on your credit card statement, find the billing cycle beginning and end date. This end date is important. Its the date that the credit card company reports your total outstanding balance to the credit agencies (aka credit reports). It is also the date they use to calculate the interest owed for the billing cycle. So – pay your credit card bill BEFORE this end date and you accomplish 2 things: 1 – the balance amount reported to the credit agencies is lower, and 2 – you will pay far lower interest over time because the interest will always be computed on a lower amount.

In essence, if you charge up 500 bucks on the first date of the cycle, then make sure you have paid it off by the cycle end date, you have “used” the credit card companies money for FREE!! Once you start doing this, its an easy way to float money for recurring stuff that has to be paid on someone elses dime for 20 days or so. In addition, make sure you have a credit card that has bonus points for charges – this adds up over time. I know people that pay the rent on a credit card, then before the due date pay the bill and thus get a free 20 day ride or so where that money is still theirs to do something else with until its time to pay back the charge.

A second thing you can make sure to do is to not ever have a larger than 50% of the outstanding credit available as a balance on a card. It seems counter-intuitive, but if they give you a $10,000.00 limit, and you use $7000.00 of it, even if you pay 2x the min payment, your credit score gets dinged. Meanwhile, your buddy, who has a credit limit of $2000.00 and a balance of $600.00 and only pays the minimum gets a bonus for NOT USING CREDIT. While its always good to pay more than the minimum balance due (usually 10% more is fine), if you are over the 50% barrier it will not matter as far as your credit score is concerned. The min payment (or excess payment beyond) is only used to calculate how much credit you might be able to handle.

If you are the type of person that does not like balances and pays off in full each month your card, you too are getting penalized (makes no sense, but it happens). If you charge up $1000.00 and pay $1000.00 each month essentially you have a balance of 0.00 (or 1000.00 depending on when you pay) – you are not getting credit for paying it all off. The best way to boost the score is to NOT pay it all off. Pay it over 3 months, or at least pay half and half. This demonstrates you can carry a balance for a few months, then pay it off. This does work and does boost your score, believe it or not.

The third and last thing I will discuss here is that every recurring bill that anyone has (mortgage, HOA fees, car payment etc) should be put on auto-pay at your bank if possible. The main reason is anything that is a fixed amount and is paid the same date every month is simply easier to auto pay it – that way it is never ever late, and is never forgotten to be paid. In addition, you save stamps and checks, and have less to worry about. Let me tell you, once you get a house, car payment, kids and all the stuff that goes with it, its easy to have 15-20 bills each month of some kind that have to be paid – and its easy to forget one until its too late.

Samantha

Tim Beachum asked:




Most people don’t think about their credit score until it’s to late. Out of desperation the individual will normally seek the services of a credit repair agency. This is a huge mistake. I don’t want you to make the same mistakes. For that reason I am going to share a few factors that you need to know to boost any credit score.

Primarily your goal is to get and maintain a credit score of 700 and above. This is what I call the breaking point. At this point you can easily get loans, lower interest rates, the sky is the limit.

To begin work on boosting your credit score you will first need to obtain a copy of your credit report. Then you will need to highlight all of the negative marks on it. The next step is to create a letter of dispute, along with any proof that your accusations are correct to the credit bureaus.

The previously mentioned action alone will boost your credit score. As a side note you should keep in mind that after improving your credit it is pivotal that you maintain your good rating. This can be done by not repeating your old habits. It doesn’t make since to ruin all your hard work by repeating the same negative process.

Although this next tip should go without saying, it is crucial that you pay your bills on time. Late payments are the most common cause of dings on your credit report.

Try not to max your credit limit 50 percent. This is an excellent technique for maintaining a high credit score. This technique will also keep you in a safe place and provide you with more buying power.

As I mentioned earlier my intentions were to give you a brief explanation of a few techniques that you could use to boost your credit score. The above strategies will increase your credit score approximately 100 points.

Lucille

Divya Mishra asked:




There are many reasons why your credit score has taken a hit. From irresponsible management of your finances to simply forgetting that you had a particular credit card-there can be many reasons. However, it is time now to focus on methods and solutions to boost credit scores instead of just finding faults.

You must adopt a constructive approach and make use of the following tips to boost your credit score. Keep in mind that each and every solution you use must be productive, effective and pragmatic.

If you cannot repay all your debts on time, it makes sense to restrict yourself to minimum repayments and spread the money over the maximum number of debts possible. Restricting yourself to just one of two debts and ignoring the rest is only going to cause damage to your score.

Regaining your good credit score is not an easy task. You will require lot of patience to boost credit scores. However, do not believe anybody who tells you that it is next to impossible.

Even if you have a bankruptcy, you can still find ways to pump your score as quickly as possible. Hence, keep these factors in mind before you take a final decision. There are many persons who have multiple credit cards in their hand so that they can juggle their finances and use one card to repay the other.

Well, this solution may seem like a smart move but this approach is known to your credit bureaus as well. They will quickly recognize that certain credit lines have been kept open but are not used.

They will conclude that you are not confident about your finances. This will result in reduction in your credit score. If you close these lines of credit, you will definitely witness a jump in your score.

A good credit score is in excess of 700. Nothing less will do. Boosting your score from 450 or 500 to 650 will be easy. However, moving from 690 to 720 will be difficult. It is obvious that you cannot get the job done until and unless you have a disciplined approach towards your finances.

The best way to find out whether you are disciplined or not is to determine the extent of limit available on your credit card. If you have utilized more than 80% of your card, it is obvious that you are not disciplined. Reducing the balance payable will look good and will improve your score.

Howard

Michel asked:


I got my credit report last week and saw a derogatory information from DTE. I owe them $6.00 since 09/2006. This was when I sold my house in MI. DTE never sent me any bill to my new address in MI (they have in file) or call me (internet home phone and cell phone never changed within 2 years). Today I called DTE and paid the balance. They say they will remove derogatory information but can’t give me any proof in written. When I called 2nd time, different lady say DTE sent something to 3 credit bureaus that the amount was paid.

Different people gave me different answer!

What can be done to fix my credit score since it is DTE’s fault not sending me bill? Shall I explain the situation to 3 credit bureaus and dispute the problem?

Kimberly

Tom Tessin asked:




Your credit score is everything, and if you have a lower score, you’re going to have a hard time getting a loan, lower interest rate, etc, and if you find that your score is too low, let me show you how you can get it up in no time. It’s never too late to start, and all it takes it a little patience, and time.

The first thing that you want to keep in mind is that you’re not going to get your score raised overnight. Instead, you’re going to want to wait at least 6 months to a year. If you can’t wait that long, you may be in for a long road of bad debts, credit scores, and this isn’t something you don’t want.

What’s the fastest way to boost my score?

The fastest way to boost your score is simply by paying off your debts! It sounds so simple, but it’s so true. People out there think that there’s some magic formula, and something that is magically going to give them a 800 score. If you lower your debt to income ratio, you’re going to have an easier time getting your score closer to the 700ish mark.

If you haven’t done so already, I would recommend that you go out, and get a copy of your credit report. From there, you’ll want to make sure everything is accurate. If it isn’t, you’ll want to contact the credit bureaus immediately to get it solved, because it’s probably hurting your score. After that, you’ll just want to pay off every debt you have. It’s that simple, and if you can follow those steps, you’ll be on the right path!

Darrell

Tony Banks asked:




Boosting your credit score by 50 points or more is doable once you understand the factors that go into calculating your credit scores. The approach you take also depends on the current state of your credit report and scores. In this article I am going to go over a few different scenarios to raising your score to get approved for home and auto loans.

The approach you will take to raise your credit score if your current score is 620 or above will be very different compared to having a score of less than 620. Raising a score that is currently above 620 will mean that you have to focus on reducing current balances on credit accounts you have now as well as possibly opening a new credit account to increase your available credit.

You simply want to show that you have more credit while not necessarily using it. A credit report with a score above 620 usually means there are no recent derogatory items such as late payments, collection accounts or charge-offs which you want to avoid at all cost.

On the other hand if your score is below 620, you want to check your report for recent derogatory items such as late-payments, charge-offs, and other negative items. Thousands of people have had success deleting these items from their reports by sending challenge letters to the credit bureaus. Deleting any of these items could add points to your current score.

I would also suggest re-establishing a new credit history by obtaining credit cards specially designed to restore your credit rating and boost your scores.

Kathryn

Dan A. Mason asked:




Ah credit, what a mysterious thing you can be. In a perfect world, the credit reporting agencies (Trans Union, Experian and Equifax) would give us clear cut guidelines as to how they calculate your credit score and convince us that there is a method to their madness. Alas, they leave us lost in darkness to fend for ourselves.

If you have ever had to deal with any of the credit agencies in correcting duplicates, outdated accounts or flat out erroneous information, you know this is no simple task. It is often a several month long, knock down, drag out contest of wills to see who gives in first. That being said, there are some specific things you can do to proactively improve your overall credit and therefore your credit score.

1) Knowledge Is Power

To begin to understand and improve your credit, you must first know where you stand right now. You are entitled to one free copy of your credit report per year. Go to annualcreditreport.com to obtain yours. Go through the entire report from each credit agency looking for errors, inconsistencies or omissions to ensure you know where you stand right now.

2) Get Up To Date

Many accounts will simply stop reporting to the credit bureaus once they are paid off. So, rather than showing paid in full with a zero balance, it will report the last balance prior to receiving the payoff. Be sure all paid accounts show paid in full, report a zero balance and show account as closed.

3) Inquire Within

Each time a creditor pulls your credit, it is reported on your credit as an inquiry. Inquiries generally remain on your credit for 90-180 days. Excessive inquiries can dramatically lower your credit score. It is important to only allow a company to pull your credit report after you have done your shopping and only if you are serious about opening an account with them.

4) Collections – Part I

Collection companies are notorious for listing the same collection account on your credit numerous times. This can trick the credit scoring programs into thinking you have more derogatory items than you actually do and therefore drag down your credit score. Be sure that any current or previous collections only appear once and the status of the account (outstanding or paid in full) is accurate.

5) Collections – Part II

If you do have current outstanding collections or charge off accounts, don’t rush in and pay them off prior to refinancing or purchasing a home It can actually hurt you in the short term. Here’s why:

Many collection accounts report once the account is created and then do not report again. So, a collection account from 3 years ago may only have reported when it was created and not since. So, it may not be hurting your credit score as badly as an account from say 3 months ago. But, if you payoff that 3 year old collection today and then get that collection company to report to the credit bureaus that it is paid in full, you are asking a 3 year old derogatory account to report current information. While this information may be positive in some aspects (the balance was paid in full) it is negative in others (a 3 year old collection is now reporting as a current collection). So, the net result may actually be a lower score.

From a long term perspective, it certainly makes sense to settle or pay all collections in full. However, don’t rush out and do this a few weeks before you apply for a new home loan. You may actually be doing more damage than good.

6) A Balancing Act

The most overlooked aspect of anyone’s credit is often their account balances. More specifically, their balances relative to their limits. A maxed out credit card, even though it may be paid perfectly every single month, will drag down your credit score. It is important to keep your credit card balances at or below 50% of their limits. You will see a significant improvement in your credit score if you can consistently keep the balances below half of their limits.

7) Oldy But Goody

The length of time you have had credit will also have an impact on your score. So, don’t be so quick to close that credit card you opened in college. It may actually be helping you qualify for better interest rates now. In addition, a new car loan, credit card or even a new home loan will reduce your credit score once it is opened. Over time, as the account establishes itself, it will only help to increase your score as you prove your ability to make the payments on time each month. However, the immediate impact upon your credit score is a reduction due to the creation of a new un-established account.

The Shallow Or The Deep End

It is important to have credit, but not too much credit. How much is enough and how much is too much? There is no exact answer to this question, but you have to use common sense. A good general rule of thumb is that you need to have a minimum of three active tradelines. That does not mean that you have to go run up balances on three credit cards, but you must show some activity on at least three accounts in the last 12 months. These accounts can be mortgages, car loans, credit cards or student loans. Often using a credit card to make a purchase and then paying the balance off in full will satisfy this requirement. You do not need to carry a balance, but you have to prove your ability to make timely payments. Using credit wisely means not over-using credit. While it may seem tempting to accept every 0% credit card offer you get in the mail, excessive open tradelines will lead to lower credit scores and turn downs from mortgage lenders. Keep your number of tradelines to a reasonable level and don’t let yourself be tempted into overloading yourself with debt just because it is at a good interest rate.

While no one can say how much each of these items will raise or lower your score, it is important to know that each one will have an effect. So, go employ your newfound knowledge and watch your credit score soar.

Mathew

William Lathrop asked:




Everyone knows that getting back on the right tract with your credit can be a long process, but some instance results might help keep your hopes up and make sure you do not deviate.