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Susan K. Ludwig
& Eileen R. Gottsegen
Susan - 561-789-5999
Eileen - 561-213-5656
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Many people are ignorant of what their credit score is, how they can hurt or help that score, and how it can be used against them. Some 49% of 1,013 consumers polled do not understand that credit scores measure credit risk, according to a 2005 survey by the Consumer Federation of America and Fair Isaac Corp. (FIC ), the company that created the most widely used credit score formula called FICO.
It's not as hard as you think to raise credit score. It's a well known fact that lenders will give people
with higher credit scores lower interest rates on mortgages, car loans and credit cards. If your
credit score falls under 620 just getting loans and credit cards with reasonable terms is difficult.
There are more than 30 million people in the United States that have credit scores under 620.
Here are a few simple tips that you can use to raise credit score.
Get a copy of your credit report. Why? If there is something on your report that is incorrect, you
will raise credit score once it is removed. Make sure you contact the bureau immediately
to remove any incorrect information.
Your credit report should come from the three major bureaus: Experian, Trans Union and Equifax.
It's important to know that each service will give you a different credit score.
Make sure you pay your bills on time because your payment history makes up 35% of your total credit score.
Your recent payment history will carry much more weight than what happened five years ago.
Missing just one months payment on anything can knock up to 100 points off of your credit score.
Paying your bills on time is a single best way to start rebuilding your credit rating and raise credit score for you.
Start to pay down your debt.
Your credit card issuer reports your outstanding balance once a month to the credit bureaus. It doesn't matter whether you pay off that balance a few days later or whether you carry it from month to month.
 Most people don?t realize that credit bureaus don?t distinguish between those who carry a balance on their cards and those who don?t. So by charging less you can raise credit score even if you pay off your credit cards every month.
Lenders also like to see a lot of of room between the amount of debt on your credit cards and your total credit limits. So the more debt you pay off, the wider that gap and the better your credit score.
Don?t close old accounts.
In the past people were told to close old accounts they weren?t using. But with today's current scoring
methods that could actually hurt your credit score.
Closing old or paid off credit accounts lowers the total credit available to you and makes any balances
you have appear larger in credit score calculations. Closing your oldest accounts can actually shorten the length of your credit history and to a lender it makes you less credit worthy.
If you are trying to minimize identity theft and it's worth the peace of mind for you to close your old
or paid off accounts, the good news is it will only lower you score a minimal amount. But just by keeping those old accounts open you can raise credit score for you.
Minimize credit-card applications. Bingo. That was cited as a problem on all three of my FICO scores. On average, a consumer has a total of 11 credit obligations, of which seven are credit cards and four are loans. I had 21, of which six had balances. Each time you apply for credit, a lender requests to view your report. This inquiry is noted and can reduce your overall score. Don't apply for unnecessary credit, and if you're in the market for a big-ticket item that requires a loan, avoid credit applications for 18 months prior to your purchase.
Avoid bankruptcy.
Bankruptcy is the single worst thing that will destroy your credit score. Bankruptcy will lower your credit score by 200 points or more and is very difficult to come back from.
Once your credit score falls below 620, any loan you get will be far more expensive. A bankruptcy on your credit record is reported for up to 10 years.
The reality of a bankruptcy is it will limit you to high-interest lenders that will squeeze out high interest rate payments from you for years.
The bottom line?
The cost of bad credit is high, no doubt -but the cost of repairing your credit can also be very expensive and many times you achieve little or no results. Credit repair is one of the most popular search terms on the Internet and consumers' continue to search for quick fixes. If you can learn anything from this page, understand there are NO quick fixes. Yes it is possible to repair your credit- millions do but don't have such high expectations that you're sorely disappointed in the end.
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