Good Way To Improve Your Credit
Good Way To Improve Your Credit - If youre trying to improve your
credit you can call your creditors and explain to them what youre
trying to do and offer to pay 30% to 40% settlement. Most companies
will allow this to happen. Its called a settlement payment. Once you
have agreed on this, you should always get it in writing then submit it
your all three Credit Bureaus. The bureaus should update your credit
report to show settlement paid in full. Even if some creditors decline,
you should still get it in writing. In a reasonable time you will see a
The most important thing you can do for your
credit score is to make all of your monthly payments on time. Even one
late payment can drastically lower your score. If you are short on cash
one month and you know you won't be able to pay all of your bills on
time, try to put your debt payments on the top of your list of
If you are having a difficult time establishing
credit, or re-establishing credit one option you may want to explore is
applying for a Secured Line of Credit. In this type of loan you would
be offering the bank some form of collateral to secure against the loan.
You can also get a secured credit card. These are
a great way to establish credit and are the easiest to get. You can do
some research online to find banks that offer them.
I suggest you should first get a copy of your own
credit report before applying for any loan. That way if there are any
errors, you have time to dispute them. There are a few simple ways to
build up your credit.
1. Establish a budget for yourself. Keep track of your spending.
2. Make sure to pay all of your bills on time.
3. Get a credit card, even if it’s a secured one.
(Hint: Every time you use your card, deduct the purchase amount from
your checking account balance. Then, when the bill comes in, you
already have the money to pay the bill in full).
Remember, there are not any fast ways to clean up your credit. By
following these simple rules, you will surely establish yourself as
credit worthy over time.
Another way of improving your credit is to ask
parents or family members that have credit cards which are in good
standing and they carry no balance to add you on as an authorized user.
That way you will gain the history of that credit card onto your own
credit report. But be advised that if they make a late payment or max
out the credit card it will affect your credit report as well.
Keep your balances on your revolving credit, such
as credit cards and equity lines, to a minimum. You should keep all of
your balances below 50% of your credit limits and preferably your
target range should be 20-40% of your credit limit. An example of this
would be if you had a credit card with a 1,000 dollar limit you would
want to keep your balance between $200 and $400 ideally. This will help
to boost your credit score. Never max your credit cards out and
definitely do not go over your limits.
Applying for too much credit can end up hurting
your score. Apply for one card at a time and allow some time before you
apply for another.
Whenever you apply for any type of credit your
credit report will be pulled. Having too many "pulls" on your credit
can drastically lower your score, even if you do not open any new
You will also want to make sure that all the
information on your credit report is accurate and true. Most reports
contain errors and some can be very damaging. You can do this yourself
or contact a credit repair company to assist you.
Looking for a good way of improving your credit
might be even more confusing now because of the many ads we see on TV
promising to fix our credit. In fact, there is little someone can do to
greatly improve his or her credit in the short run. Credit history
(which accounts for 35 percent of your score) only can be replaced with
new history. Since there is no way to erase your payment history, the
only good way of improving your credit in the long run is to pay on
As for those companies promising to fix your
credit...remember, they can't do anything for you that you can't do for
How can I improve my credit score - How can I
improve my credit score? This is a very common question that is asked
quite often. There are many different factors that will impact your
credit score, good or bad. One such factor, that is probably the most
obvious, is making all of your payments for all of your bills on time.
This has the single biggest impact on credit scoring of all other
single factors. Payment history accounts for roughly 35% of your total
credit score. If you do have derogatory credit or late payments in your
credit profile, the more recent the late payments are, the more
negative the impact will be on your credit score.
Correct blatant mistakes. Your credit score is
only as good as what shows up in your credit report. Review your
reports from all three credit bureaus for accuracy once a year as well
as several months before applying for a loan. Changing a mistake on
your report - such as a payment that is wrongly labeled as late -- can
take 30 days to three months, sometimes longer.
You should also have a mix of different trade
lines. Limiting yourself to 3-5 revolving cards and installment loans
such as an auto or home loan will result in a higher score than
multiple revolving accounts alone. It is also important not to open and
close credit accounts frequently. Transferring balances to new
intro-rate cards may look attractive, but lenders also like to see aged
accounts with perfect payment history.
In a situation where you do not have credit scores
due to lack of use of credit in the past, you can apply for a couple of
credit cards and the three major credit bureaus will create a credit
profile for you. However, it can take 3 to 6 months for the credit
scores to show on your credit report. Always manage your credit in a
responsible manner to get higher credit scores.
One of the best ways to improve your credit scores
is to look at your balance to limit ratios. Open up your latest credit
card statements and write down your balances on one line, and your
credit limits on another. If the balance on any one of your cards is
more than 50% of your limit, you may see immediate benefits by either
paying down the balance until it is below 40% of the limit, looking
into raising the credit limit on that card, or by moving around some
the balances onto other cards which have plenty of available credit. If
many of your credit card balances are above 70% of their limits, you
may be a good candidate for a debt consolidation refinance to help
reduce your debt ratios and improve your credit scores. To review your
credit with a financial professional experienced in analyzing credit
reports, contact a financing advisor at 415-617-5448 or via email at [email protected]
Paying credit card balances down below 50% of the
high-credit limit will help increase your credit score.
It is very important to remember that in today's
market, you can still get a mortgage even with a low credit score. Many
lenders offer what are known as "subprime" mortgage loans. These loan
programs are designed for customers with less-than-perfect credit. They
typically carry a higher interest rate, since the mortgage is
considered riskier for the lender. However, obtaining a mortgage and
making the payments on time is perhaps the best and quickest way to
raise your credit score.
So if you are considering a home purchase or a cash-out refinance, and
your credit score is on the low side, do not be discouraged! There is
likely still a loan program out there that will be perfect for you for
the short-term period. Before you know it, your credit profile will
have greatly improved and you will be able to refinance into a much
more attractive mortgage program. Call me at 415-617-5448 for more
details on the many programs we have to offer.