Credit Repair Secrets Only The Insiders Know
Donít worry if your score isnít considered ďexcellentĒ or even ďgoodĒ, there are plenty of lucrative investment plans available for you. However, as your credit score increases so will the number of investment plans available to you. That is why it is important for you to improve your credit score. The more investment options available to you, the more quickly you will be able to achieve and exceed your financial goals. IMPROVING YOUR SCORE The following tips will help you improve your FICO score:
1. Never carry balances over 50% of the available limit on your credit cards. If necessary, break up high balances on to several different cards to avoid that 50% number.
2. Always make more than the minimum payment on your cards. Minimum payments generally imply that you are struggling to even make your payments and you are therefore considered a higher risk.
3. Avoid excessive inquiries. There are two different types of inquiries, hard and soft. A hard inquiry is when a potential creditor is pulling your credit to determine whether or not they want to lend to you. These are the inquiries you want to avoid. Granted you canít avoid inquiries all together but be selective about who you allow to pull your scores, as each inquiry lowers your score. A soft inquiry is when you or an insurance company, for example, pulls your credit not because they are considering lending to you, but rather to see how you have performed in the past on your obligations. These inquiries donít lower your score.
4. Establish longevity. Donít open and close accounts too frequently. Be selective of which accounts you want to open and maintain them for long periods of time.
5. Donít have excessive available revolving credit. Now donít misunderstand: available credit is good, but too much available credit poses a risk to potential lenders and therefore lowers your score. ESTABLISH GOOD CREDIT If you donít have any credit history established, apply for and obtain three different credit cards. Use these cards to purchase all of your necessities such as groceries, gas, etc. This isnít an opportunity for you to be frivolous and incur debt, but rather an opportunity for you to pay these lines off every month which will help you establish some history. Go to a local bank or credit union and tell them that you are interested in obtaining a secured loan for the purpose of establishing your credit. The bank will give you a loan, generally $1,000 which will be placed into an account in your name. Each month the bank will pull enough money from your account to make the loan payment. The benefits you will receive of establishing a solid credit history far outweighs the minimal interest expense you will incur by utilizing this strategy. Repeat this process at several banks to expedite the desired result. Three to six months after following steps one and two, pull your credit report and verify that these accounts are showing up and you have a score. Once you do you are on track to establishing impeccable credit. REPAIRING POOR CREDIT Do whatever it takes to resolve any unpaid collections and ALWAYS make your payments on time. This may entail cutting your expenses wherever necessary in the beginning but rest assured that your sacrifices early on wonít go unrewarded in the end. Avoid the services of credit counselors who negotiate balances and interest rates with your creditors. Potential lenders often frown on these services even more than a bankruptcy. There are legitimate resources out there for repairing your credit, but if negotiating with your creditors is a part of their process, beware. Even if you have experienced bankruptcy, foreclosure, etc. after following these steps and proving that you are now an acceptable credit risk, you will notice your score improve fairly quickly. CREDIT RULES TO LIVE BY Avoid bad debt purchases. Bad debt purchases are any purchases for frivolous, depreciating items. Pay your debts on time and in full. Monitor your credit monthly. Subscribe to a service such as Privacy guard that allows unlimited access to your reports for a nominal annual fee. Dispute any incorrect, derogatory remarks that appear on your credit. Also keep an eye out for accounts that you have never opened that may be erroneously reported in your history.
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