Credit Repair People

One of the most powerful pieces of knowledge you can have is understanding how the three major credit bureaus assign your score to you. Most often, people are never taught about their credit scores.

Here’s a brief explanation of the system -

Payment History: 35%
Payment history makes up the largest piece of your credit scoring model. It reflects how timely you make payments to your creditors.

Credit Utilization - 30%
Your credit utilization is how much of your credit you’re currently using. An easy way to boost your scores is to keep your balances below 50% of your total credit limit.

Credit History: 15%
Credit history indicates the length of time your credit has been open for. Newer accounts aren’t regarded as well as older accounts are.

Recent Inquiries: 10%
Recent inquiries let you know which prospective creditors have looked into your credit. Scores can be lowered by too many inquiries.

Types of Credit In Use - 10%
Your types of credit in use lists how many accounts you have, and what kinds of accounts they are. Having too many loans can lower your scores.

Now that we have a little knowledge under our belts, here are the 2 things you can do in the next 30 minutes to gain some points very quickly

Raising Your Limits -
It’s often easier to raise your limits than you think it might be. You might not realize that most times, all you have to do is ask that your limit be increased and your wish will be granted. Call the customer service department of your credit card company and let them know you’re looking into transfering your balance to another card with a lower interest rate and a higher credit limit and that you’d like to keep your account with them, but only if they are willing to make the concessions you are asking for. A lower interest rate might just come with your new, high credit limit! A lower interest rate won’t help your credit scores, but it will definitely help your financial situation.

For example … Let’s say you have a credit card with $5,000 as your limit and your balance is $4,000. Your card would be 80% utilized, well over the recommended percentage of 50%-or-lower. One phone call to the customer service department of your credit card company could raise your limit to $6,500. You would now be looking at a 62% credit utilization instead, which would definitely be a positive way to impact your scores.

Lower Your Balances -
Using the existing example, your credit card has a 62% credit utilization on it. You can still maximize your scores on this card. Paying $750 down will bring your balance down to 50% of the credit limit, or having $3,250 balance on a $6,500 credit limit credit card. Even if you can’t afford to pay the $750, you’re still sitting pretty because you’ve already increased your scores by having your limit raised. Keep in mind, though, if you are trying to purchase a home or a car, you can save thousands of dollars in interest on your new loan, and you can also get an even lower monthly payment, just by paying down your existing accounts. That will result in even better credit scores and the terms of your loan will be even better than before!

All of the tips listed above have shown to be effective and powerful in helping to achieve even better credit scores. One past result showed that these tips helped to increase the credit limit on 3 credit cards, and scores were boosted by 105 points!

Keep in mind that these techniques work best for those who have a good credit history, and at least 3 open, established credit accounts. For those with more challenged credit or a negative credit history, a more aggressive approach and credit repair strategies may be more appropriate.

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Tags: business, Credit Repair, credit reports, credit scores, debt, finance, financial, improve credit, investing, mortgage, personal finance, real estate