Credit Repair and Credit Scores Explained

Credit Repair and Credit Scores Explained

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Home Page > Finance > Credit > Credit Repair and Credit Scores Explained

Credit Repair and Credit Scores Explained

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Posted: Jun 02, 2009 |Comments: 0
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The Credit Bureaus

Many people starting a credit repair program are under the misconception that the credit bureaus are in some way connected to the government. It is easy to understand this perception. But, as influential as they are, the credit bureaus have no government blessing, charter, or otherwise. They are big business. There are three credit bureaus that count. They are Experian, Equifax, and TransUnion. They are in the business of gathering credit data about you and selling it to potential creditors.

The Fourth Contender

There is one other credit bureau of substance called Innovis. Innovis is a significant player in the credit data markets, but is not a concern for your credit repair effort. They specialize in gathering and sorting data for pre-screened credit card offers. The mortgage giants Fannie Mae and Freddie Mac were instrumental in the accent of Innovis when, in 2001, they demanded that their mortgage servicers report payment histories to Innovis. At the moment Innovis operates behind the scenes, but there have long been rumors that they are planning an assault on the consumer market.

The Credit Score of Choice

Almost without exception lenders use a single type of credit score in making loan decisions. This is called the FICO score and will become a focal point of your credit repair project. FICO is an acronym for the inventor of the score, Fair Isaac and Co. The three bureaus sell these FICO scores directly to lenders and have re-named them for marketing reasons; Equifax calls it a BEACON score; TransUnion calls it an EMPIRICA score; and Experian calls it the EXPERIAN/Fair Isaac Risk Model.

Your Scores May Vary

At the outset of your credit repair project you may want to benchmark your effort by checking your credit scores. You will notice that your scores with the three bureaus are different. This is because each bureau receives data from a different mix of creditors. Some creditors report to all three bureaus, but many don’t. If you examine your three reports you will see that some accounts are missing on each bureau. Reporting schedules also play a roll. Changes in your balances are normally picked up sooner at one bureau than another.

The Makeup of Your Score

The precise formula for calculating your credit score is kept secret. But Fair Isaac offers a significant amount of information about the rudiments. If you are looking for credit repair results it is wise to familiarize yourself with the basics. As you start to work on optimizing your scores you will begin to develop an intuitive grasp of the nature of the scoring model.

Payments

Your payment history comes first and plays a major roll. This includes installment and revolving debt payments. The age of each derogatory event reduces the impact it will have on your score. For credit repair purposes, don’t worry about the past, just make sure that you make all payments on time from now on and you will be fine. Fair Isaac says that this category represents 35% of your score.

Balances

Your balances are the next category, and although in second place, they may be the most important to your credit repair project and to any effort you are making to optimize your scores. Revolving balances carry the most weight, and the relationship between your balance and the limit on your revolving accounts is the key. Installment balances come into play as well; older, time-tested installment debt will help your scores. Fair Isaac indicates that this category makes up 30% of your score.

Age

The age of your credit plays a role as well. New credit will depress your scores for the simple reason that it is untested. You may need to build new credit as part of your credit repair project, but as each month passes the negative impact of new accounts fade quickly. Old accounts are a credit repair asset and should be preserved. This category makes up 15% of your score.

Inquiries

Credit inquiries have a negative but small impact on your scores. Inquiries indicate to the FICO model that you are planning to incur new debt. Fair Isaac credit score engineers will lower your scores temporarily when you have inquiries as a warning to prospective lenders that your budget may be facing new challenges. The impact of inquires fade quickly. Fair Isaac weighs this at 10% of your score.

The Right Mix

Last and least, the type of credit makes up the final 10% of the score calculation. This last category brings to light the fact that there is an ideal mix of debt types for credit score perfection. Fair Isaac does not reveal what the perfect mix is, but when it comes to credit repair success you should focus on building a nice balance of accounts, making your payments on time, and keeping your revolving balances down.

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Ian Webber is an expert in consumer law and credit repair. Ian is a graduate of the London School of Economics and The University of Chicago where he earned his LLM. Ian consults with one of the leading online credit repair services and is currently based in Florida.

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How Credit Scores Affect Your Mortgage

How Credit Scores Affect Your Mortgage

How Credit Scores Affect Your Mortgage

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Home Page > Finance > Credit > How Credit Scores Affect Your Mortgage

How Credit Scores Affect Your Mortgage

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How Credit Scores Affect Your Mortgage

By: Alon Cohen

About the Author

With over 10 years experience in the online space, Alon Cohen is a dedicated consumer advocate and focuses his time researching different industries in order to find the best online products and services.

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Article Source: http://www.articlesbase.com/ – How Credit Scores Affect Your Mortgage

Your credit score reflects your credit worthiness as it is described by a financing body which would require your credit report to award you with the right credit limit. There are a number of credit reporting agencies in the online world that offer reports from three major bureaus of the United States. These bureaus include Experian, TransUnion and Equifax. Depending upon the outcome of these reports, financial institutions will award you with the ideal credit score that will meet your financial requirements. This entire concept has been approved by the US federal bureau of finances so as to help people with the ideal credit limit and at the same time offer financing institutions with risk free credit limits to be provided as per their operational procedures. It has been noticed throughout the years that the credit report of an individual directly affects the interest rate on ones mortgages. Let us try to understand the possible ways credit score mortgages are affected.

The Fiar Issac Corp (FICO) is the governing body that decodes the credit score to reflect off a mortgage. They are the most influential name in the credit score department where their final report is taken seriously and contributes towards the credit score mortgage scenario. Their scores range from 300 to 850 and have formed the guidelines for all US credit score mortgages. Apart from FICO, VantageScore is another governing body that affects the credit score mortgage. It is available for cheaper rate compared to FICO, however their scores are not direct substitutes for each other. This is the main reason why individuals prefer the FICO credit score mortgages compared to any other. Depending upon the credit score that is obtained from FICO, it directly reflects off the mortgage interest level of an individual. Those individuals that have gained a higher credit score through FICO will find that their interest levels on their mortgages are comparatively lower compared to those with lower interest rates. Here is where individuals will find it important to ensure that they receive the highest possible credit score mortgage.

A FICO score that ranges somewhere between 500 to 540 generally comes as a lower credit score mortgage and can qualify for a mortgage. It may have a higher interest rate compared to any other credit score and will form the base of the credit score mortgage. There are a number of variations when it comes towards getting a credit score which will affect a mortgage interest rate. On an average, a credit score between 750 to 850 has an interest rate of around 5.70% while credit scores between 500 to 570 have an interest rate of around 9.50%. As you can see, the credit score directly affects the mortgage calculation where the interest rate increases with a lower credit score. Hence, it has become important that those individuals that would not want to pay higher interest rates opt for a way in which they can gain the highest possible credit score mortgage. The best way in which this can be achieved would be by electing a credit reporting agency that can formulate a good credit score for you.

There are many online services claiming to offer the best credit report for your money, however, I have found that only one consistently provides the most accurate information at an affordable price.

CreditScoreDirect.com is by far one of the best credit report companies on the web. Find out what your credit score is today.

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Why You Need All Three Credit Scores

Why You Need All Three Credit Scores

Why You Need All Three Credit Scores

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Home Page > Finance > Credit > Why You Need All Three Credit Scores

Why You Need All Three Credit Scores

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Why You Need All Three Credit Scores

By: FreeScore.com

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FreeScore.com is a destination site for an increasingly credit-conscious public. The site offers immediate access to credit scores, reports and monitoring as well as educational information and tips on how to safeguard one’s credit and identity.

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Article Source: http://www.articlesbase.com/ – Why You Need All Three Credit Scores

“Why do I need to know all three credit scores?” is a valid question. The answer provides even more information that you’ll want to know, since it holds the key to understanding many different facets of managing credit. In addition, with credit scores having an influence on your potential employment, the interest you pay on loans, and many other important factors, here are some very good reasons why you need to know all three credit scores:

It’s up to you to manage your credit.
There are companies that will help you monitor your credit scores and reports, but managing your credit is your job, and no one else can do this for you. Your name is at the top of each report; therefore, you’re the one who will reap the benefits of good credit scores or suffer the consequences of poor ones.
Mistakes on credit reports can negatively affect credit scores.
Mistakes on credit reports that negatively affect credit scores are more common than you think! With so many machines transferring financial information back and forth each day, it’s almost inevitable that most people will have a mistake appear on their reports at some point.
Your credit scores can affect your employment opportunities.
Many employers will check out an applicant’s credit scores to get an idea of how responsible the applicant is. Potential employees with good credit represent a better risk for investing the necessary time and money in regard to training, responsibilities, cash handling, etc.
Credit reporting agencies are competing against each other.
You may not know this, but each of the credit reporting agencies are competitors that don’t share information with each other. Therefore, credit information that could potentially improve your credit scores may or may not appear on your credit report.
Checking your credit scores can help you uncover an identity theft incident.
Lenders don’t report credit information to all three credit reporting agencies, so if you’re a victim of identity theft, you may not be able to see it by only seeing one of your credit scores. Credit scores always vary somewhat, but if one of your credit scores is much lower than the other two scores, you’ll want to look deeper to see if there are problems that need to be addressed through the credit bureau that gave you the low score.

You need to know all three credit scores for the reasons listed above and many more. Besides, since these credit scores are so important to your finances, don’t you want to know all three credit scores? Of course you do. There are a few different ways to get your credit scores. You can apply to TransUnion, Equifax, and Experian individually for your scores, or you can sign up with a professional credit-monitoring agency that will get the credit scores for you and provide several analytical tools and other features to help you manage your credit. Either way, you definitely want to see all three credit scores on a regular basis to stay on top of your credit.

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Credit Scores Count – Find Out How to Evaluate and Raise Yours

Credit Scores Count – Find Out How to Evaluate and Raise Yours

Why do some people get offers for pre-approved credit cards and others don’t? What do car dealers know about your financial health that you don’t know? The answer is your credit score.

Your credit score is a number generated by a mathematical formula to estimate how likely you are to pay your bills. Based on the information in your credit reports from the three credit bureaus, Equifax, Experian, and TransUnion, your credit score has been a factor in your ability to qualify for loans and good interest rates for more than twenty years. Lenders compare your credit report with millions of others to determine your score.

While there are a variety of credit scoring methods available to lenders, the most widely used is the FICO score. Based on a scoring system developed by Fair, Isaac & Co., FICO scores range from approximately 300 to 800 points and are provided to lenders by the three credit bureaus. You also have access to your FICO scores but will be charged a fee by each credit agency providing your report.

According to Fair Isaac, the credit scores of the American public are divided as follows:

• 499 and below 1 percent

• 500-549 5 percent

• 550-599 7 percent

• 600-649 11 percent

• 650-699 16 percent

• 700-749 20 percent

• 749-799 29 percent

• 800 and above 11 percent

A score of 720 or higher will probably get you the best interest rates on a home mortgage. Your credit card company looks at your credit score to decide whether or not to raise your credit limit or charge you a higher interest rate. The higher your credit score, the better you look to lenders and the lower your interest rates.

Several factors affect your credit score including your payment history, the length of your credit history, any outstanding debt, how long and how often you’ve had derogatory credit information, such as bankruptcies, charge-offs, or collections, and the amount of credit you are using compared to the amount of credit available to you.

So how do you raise your credit score? Well, the first thing to do is to order a copy of your credit report with the score included from each of the three credit bureaus. Review your reports and note any discrepancies. Correcting blatant errors is the first step to repairing your credit, and changes can take up to three months to be recorded.

Next, remember to pay your bills on time. It may seem like a small thing at the time you’re writing that monthly check, but an accumulation of timely payments says a lot to a potential lender looking for a reliable client. Prompt payments in the last few months can actually make a big difference in your credit score.

While collections, bankruptcies, and late payments have the greatest negative effect on your credit score, your debt is a factor as well. Keeping your account balances between 25% and 50% of your available credit signals a responsible borrower. For example, if you have a credit card with a 00 limit, keep your debt below 00. For this reason, consolidating your credit card debt can actually lower your credit score, as it raises the ratio of your debt to your available credit. The best solution is to simply pay off your existing cards as quickly as possible.

Excessive inquiries over a short period of time also damage your score. When lenders, banks, or credit card companies check your credit report, the inquiries are recorded. Several of these “hard inquiries” in the same time period may signal to other lenders that you are opening multiple accounts due to financial difficulty.

If you discover that you have accounts on your report that you didn’t open, or your public records such as tax liens or judgments that are not yours, you may be a victim of identity fraud. It is up to you to deal with the damage that can happen to your credit score because of this criminal activity. Being aware is your first step, but when the items end up on your report, you have no alternative but to clean it up.

Overall, give yourself time to build a good credit score and even more time to correct serious problems. The length of your credit history is another determining factor in a good score. Lenders want to know that you are able to maintain prompt payments and good standing for a period of time. So check your reports yearly, do your due diligence, and your score can improve.

Cathy Taylor is a marketing consultant and freelance writer and can be reached at creativecommunications@cox.net

Fixing Credit – Basic Tips For Fixing Credit Scores

Fixing Credit – Basic Tips For Fixing Credit Scores

Here’s how you can get great credit scores:

1. Know how to reach the three Credit Bureaus

There’s three credit bureaus – Equifax, Experian and Trans Union. The three major credit bureaus are important especially if you are going to be fixing your credit score. The major three credit bureaus can assist you by sending you your credit scoring report and guiding you how to correct errors. You can contact these agencies by email, telephone, or through the web.

2. Smoking kills your credit score

Smoking kills and sometimes it can kill your credit sore. Lets say you get health insurance. Your insurance company may ask you questions about your health. One of the questions will be about whether you are a smoker. If you are a smoker, your premiums will be higher than people who don’t smoke. Paying higher premiums on health insurance means less money towards your other expenses.

3. Collection agencies, deal with it

Most collection agencies are good at what they do. Some are great. Deal with it. People in debt feel so ashamed of their low credit rating that they feel they deserve the abuse and harassment that they get from collection agencies. A low credit rating does not entitle collection agencies from harassment or abuse. If this occurs, report collection agencies immediately.

4. Three scores

There are three collection agencies so you have 3 scores. However, the top and bottom score are generally omitted from loan applications so the middle one represents your credit score.

5. Pick a reputable credit repair service
There are numerous credit repair service agencies available. Lexington Law is by far the best at removing negative items on your credit report.

John Stocker is a bad credit repair specialist devoted to helping people remove foreclosure from their credit reports.

Posted by Editor on Tuesday, August 24, 2010 at 10:05 pm
Filed under Credit · Tagged with BASIC, Credit, Fixing, Scores, Tips

Credit Repair: How Credit Scores Really Work

Credit Repair: How Credit Scores Really Work

Not all Scores are Equal

One Score with Three Names

The FICO score may be referred to by three different names. This is because the three bureaus have branded it for their own marketing. Equifax calls it a BEACON score, TransUnion calls it an EMPIRICA score, and Experian calls it the EXPERIAN/Fair Isaac Risk Model. Because of this you will hear of three different scores, although they are all a product of the same formula.

Why Are Your Three Scores Different?

Your three scores are different because each bureau gathers information from a slightly different mix of creditors. If you were to look carefully at your three reports you will notice that some accounts are missing on each bureau. Timing also plays a roll. A recent change in your credit may be picked up sooner at one bureau than another.

What is Included in Your Score?

Are you working on credit repair? Be proactive. But in order to influence your score it is essential to understand how it works. Here is an overview of the contributing factors.

Pay History

Your pay history is the big ingredient. This category includes installment and revolving accounts, as well as public records and collections. The age of a derogatory item diminishes its impact on your score. The first step in the credit repair process is to examine your report for obvious errors in this category which makes up 35% of your score.

Balances

Your account balances make up the next category. The relationship between the balance and the credit limit on your revolving accounts is a major factor. Anyone involved in a credit repair effort should minimize their revolving balances as much as possible. The relationship between the current balance and the original balance on installment loans is also taken into consideration. This category makes up 30% of your score.

The Age of Accounts

New credit will have a negative impact on your score, and those accounts that you have kept alive and healthy for years have a good impact. Closing old accounts is a common credit repair error to be avoided. This category makes up 15% of your score.

New Credit & Inquiries

New credit and recent inquiries are a factor. Many credit repair candidates open new secured credit cards for the long term benefit. But generally, anyone involved in credit repair should limit new credit activity. Either way you will lose a few points on this one. Fair Isaac weighs this at 10% of your score.

Type of Credit

The type of your credit is the final 10% of the calculation. Fair Isaac won’t define the perfect mix of mortgage, installment, revolving, and consumer debt, but in our experience the key to a long term successful credit repair effort is to be a moderate user of credit, make your payments on time, and try to keep those revolving balances down.

False Credit

As you begin your credit repair effort it is important to have reliable information. Amazingly, the same three credit bureaus that sell authentic FICO scores to lenders also sell unreliable estimated scores to consumers. Every day untold numbers of consumers go to TransUnion’s “True Credit” website and pay for what they believe to be their credit scores. What they get are deceptively named “TrueCredit” scores which vary significantly from the FICO scores used by lenders. Here is the (almost impossible to find) small print from the TransUnion website. “TrueCredit is not connected in any way with Fair, Isaac and Company; the credit score provided here is not a so-called FICO score. The credit scores of TransUnion may not be identical in every respect to any consumer credit scores produced by any other company.”

Real Credit Scores

Are you starting the process of credit repair? Do you want to see your real FICO scores? MyFico.com is the only place that consumers can purchase their authentic FICO scores. Want to save some money? It is handy to know that mortgage brokers typically look at all three FICO scores when pre-qualifying you for a mortgage. If you ask, they just might give you a copy of your report along with all three scores. It can’t hurt to save a few dollars!

Jim Kemish is the president and founder of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida. Power Mortgage Corp was established in 1989 and serves the states of Florida, Georgia, Massachusetts, and Virginia. Jim is also the President of Sky Blue Credit, a national credit repair business.

Posted by Editor on Monday, August 16, 2010 at 2:05 pm
Filed under Credit · Tagged with Credit, really, Repair, Scores, work

Repair Credit Scores – How to Derail Credit Collection Companies

Repair Credit Scores – How to Derail Credit Collection Companies

I research techniques on how to repair credit scores often, mainly, for my own credit history and repair attempts. Unfortunately the current economy left me without a job and it took longer than expected for me to get back on my feet. Building reserves is tough enough, going through them and dipping into credit cards is even harder. Here’s a little of all I’ve picked up on credit and credit repair while increasing my credit score by 75 points.

Let me start by saying that I understand how people feel when there’s no way to pay a bill. You struggle with it inside. Myself, I always paid my bills on time and usually in full. If I had been dealing directly with my original creditors I would have settled in higher amounts on all my accounts. Unfortunately they sold my accounts to collection companies and after a short while I built a serious resentment for these companies. They treat me with no respect and harass me at all hours of the day. I finally got a new job and they started calling there. Getting a job with bad credit was hard enough, then having to deal with the calls at work. Forget about it.

For that reason I looked for ways to get these companies off my back and pay them as close to nothing as possible. Everything I had read to that point was information on how to dispute an account. I had read about learning about credit laws but I never really saw the point to it until I found a manual that told me why knowing the laws would help me. I assumed the laws were there to help the creditors not me. I was wrong. They have rules and if they don’t follow them you can get their accounts off your report.

The Three techniques below made a huge difference on how I worked with those collection companies.

First, making sure the collection company has all its licensing, bonding and insurance requirements. If they collect outside of their state, they must have the bonding licensing and insurance for any other states they collect in. Many times they only have for their home state because of the cost involved. If they don’t comply, they can’t collect from you and they have to remove it.

Two, requesting that the collection company show actual proof they are allowed, by the original creditor, to collect from me. If they don’t show proof, they can’t collect from you and you can dispute it with the credit bureaus.

Last, is getting them to show proof you owe the debt. This sound as something easy for them to have and provide evidence, yet they have to provide copies of the original contract you signed when applying for the account. If they don’t have it they can’t collect. With many credit card companies merging, it gets more difficult for them to produce them. Again dispute and remove it.

Those three saved me a lot of money. I did settle for a deletion letter on a couple of accounts but most I was able to remove with the techniques above. I hope I annoyed them as much as they annoyed me.

Credit repair techniques change. Using the most current techniques to dispute correctly has worked well for me. I understand my credit now and strongly recommend consumers understand this critical aspect of their financial life. There’s a lot of information out there. Below is what helped me the most. Credit Repair Reviews
How to clean credit up.
Repair Credit Scores
Copyright 2010 Rene C. Alexander.

Posted by Editor on Tuesday, July 6, 2010 at 6:06 am
Filed under Credit · Tagged with Collection, Companies, Credit, Derail, Repair, Scores

A High Score Saves You Money – Methods You Can Use To Repair Credit Scores That Get Results

A High Score Saves You Money – Methods You Can Use To Repair Credit Scores That Get Results

You need to repair your credit score, if you have a poor credit rating and a low score on your credit report. Generally, you need to have a high score, somewhere between 575 and 650 for creditors to see you as a good risk for them to loan money to. How to increase your credit score ? Do not worry. You are not the first person to ask this question. Currently more than 35 million Americans are struggling with issues related to bad credit. This can seem like a never ending nightmare. There is no bad debt fairy dust that will solve your credit problems overnight. However, there are a lot of things you can do that will boost your credit in no time. The only thing required is knowledge about the credit system and various loopholes in it.

Looking to borrow money or applying for credit at many places is detrimental to your credit score. In order to have a good credit score or to repair credit score, you should not have a long list of creditors making inquiries about you. Each of these shows up on your credit report and does result in you getting a lower score. If you want to raise or repair your credit score, start pinching pennies and paying your bills on time.

In order to repair your credit scores, it’s important to know where you stand currently. The three – digit numbers, which range from 300 to 850, are the key to your borrowing costs.

Paying off your installment loans ( mortgage, auto, student, etc. ) can help your scores, but typically not as dramatically as paying down revolving accounts such as credit cards. Lenders like to see a big gap between the amount of credit you’re using and your available credit limits. Getting your balances below 30 % of the credit limit on each card can really help.

Paying more than the minimum monthly payment is also another way to repair a credit score. Not only will it help to give you a good credit score, but it will also help you to pay off your bills before the actual due date. This is because you are paying more on the actual balance and thus lowering the amount of interest that you are charged each month. When creditors check out your credit report, they see you are conscientious and this looks good for you. It really helps to repair a credit score

Another alternative to improve your credit rating is through small loan or credit card. If you do not have any of them, you are encouraged to apply for one. Ask your family member or friend to be a co – signer for a small loan or unsecured credit card. The main purpose of doing so is to reestablish your credit. What you must do is to make prompt payment on your new loan. By doing so, you will be able to repair credit score gradually.

In order to add positive information to your credit report, you may request creditors to report your account information, as well as monthly payment history to a credit bureau which will help demonstrate stability in your credit file. Taking out secured credit cards will also help you build a solid credit history.

According to the mainstream credit advisers fixing credit takes time, determination, financial effort, careful budget planning and patience. This formula has proven to repair credit score over time. However, most of us want that fantastic house, brand new car now. Time is a luxury we ca not afford. And this is where credit tricks and little known secrets come into play. Why try to rebuild your credit gradually when you can focus on the negative items in your report that have the biggest impact on your score ? Why pay everything in full when you can negotiate settlement for a fraction of the debt ? Why getting delinquent accounts ” deleted ” from your report is much more beneficial that simply paying them off ? Learn more about the loopholes in the system and find the shortcuts to a better credit score

Raising credit score is not hard. There are various tricks and little known secrets that will help you boost your score in no time. Once you start thinking outside the box, you will be surprised to find how easy credit repair actually is.

Educate yourself about credit report repair Becoming credit smart, the smart first step is to take when considering credit repair programs and services. The choice is up to you. We have helped countless people access the information they need to repair bad credit reports and regain control of their credit status

Find More Repair Credit Articles

Posted by Editor on Wednesday, June 23, 2010 at 10:07 pm
Filed under Credit · Tagged with Credit, high, Methods, Money, Repair, Results, Saves, Score, Scores

Credit Repair Tips to Increase Credit Scores Fast

Credit Repair Tips to Increase Credit Scores Fast

In today’s finance industry, when applying for a loan, 95% of lenders will submit your application through an automated system. This automated system will determine if you will be approved or not based on your credit scores. Their automated systems do not look at credit history. HMMMM!

Most banks have set rules on how to qualify a borrower for the best loan terms, and those rules almost always place a major emphasis on your credit score. If their best rates are offered to borrowers with a score of 700 or higher and yours is a 697, those three points could cost you thousands of dollars when it comes to financing!

According to http://tinyurl.com/orderFICO , the consumer Web site of the Fair Isaac Corp. that created the FICO score (the most commonly used credit score), the interest rate difference between those two scores is one-half percentage point. You may also enroll for their great monitoring service. Just click on the link.

The good news: You can take steps to improve your credit score by applying easy self help techniques. T

There is several ways and variables that play into an individual score make it impossible to say that one particular action will increase a given score by a certain number of points. Sometimes, I have great results when a borrower pays down a credit card or pays off a collection; other times, it makes very little difference. But there are at least some good guidelines to try and follow.

Here are some tips I’ve picked up along the way:

1. The fastest way to a great score is pay your bills on time, keep account balances low, and take out new credit only when you need it. This is mainly about plain old common sense. People who do these things faithfully usually have very high scores. To lenders, high scores signify that you’re being conservative and cautious about credit. In turn, they see you as a lower risk borrower and will reward you with much better terms and a much lower interest rate.

2. What if you’re house hunting and you just need a few extra points to bump you over the line to the great rates? Start by having your mortgage broker, pull your credit report and your credit score to see where you are. If your score is above a 720, you’re golden. Even 700 is going to get you good terms. Improving your score from, say, a 720 to a 740 won’t get you better terms, though, so don’t waste your time doing that. Just continue to follow the guidelines above.

What you’re really looking for on your report are factors that could be negatively affecting your score. Look for errors in the report, such as accounts that aren’t yours, late payments that were actually paid on time, debts you paid off that are shown as outstanding, or old debts that shouldn’t be reported any longer (negatives are supposed to be deleted after seven years, with the exception of bankruptcies, which can stay for as long as 10 years). Every time I meet with a client, I go over their report with them to ensure that the information is correct. I can’t tell you how many times there has been old or downright incorrect information in the report! 75% of credit reports contain errors. Hmmmm!!

You may visit us online and have out team repair your credit at a low cost. Saves you time and headaches. After repairing errors, the fastest route to a better score is paying down balances on credit cards; in my experience, it’s possible to increase your score up to 200 points or more in 90 days by paying down your credit lines because it helps your debt to credit ratio. 30% of your scores are calculated by how well you manage that area. If you can’t pay them down then you must apply for new credit to offset your debt to credit ratio. What that means is that, the credit scoring system looks at all your credit card limits and your credit card balances and calculates what your credit limit vs. what your balances and shoots out a percentage. So for example, If you have a credit card limits that amount to 000 and you owe 00 on them, you are at 80% of the credit limits. Your debt to credit ratio in that case is at 80%. Typically you want to be at 30% or less. If you would like to apply for high credit limits to help your debt to credit rations visit www.ePublishingUSA.com . They approve anyone with a heartbeat. Let all your friends and family know so you can help them with their credit.

3. Had a few late payments in your past? No problem, call Attractive Credit and they may help. Visit Attractive Credit Secrets for self help.

From now on, do your best to pay your bills on time (or ahead of time) and keep your balances as low as possible. After 12 months the scoring module becomes immune to that late and your credit scores are not affected.

4. One thing you shouldn’t do if you’re just trying to boost your score is close unused accounts. If someone tells you to close unused accounts to improve your score, don’t listen. It won’t help you and it can hurt you.

Closing unused accounts without paying down your debt changes your utilization ratio, which is the amount of your total debt divided by your total available credit. You appear closer to maxing out your accounts. That’s why your score can drop. It doesn’t mean people shouldn’t close them, but don’t close them to improve your score.

If you do cut up cards, though, leave the oldest one open! The length of your credit history is another factor in your score. If you close the account of the credit card you got when you were a freshman in college and leave open the ones you just got within the last couple years, it makes you look like a much newer borrower.

Bottom line: know that you’re not powerless when it comes to your credit score. There are a lot of things you can do to improve your score and you need to understand what your credit is like now and what’s influencing your score today. Then you can go out and get that amazing interest rate!

Juan J. Medina has been helping consumers repair their credit and increase credit scores via self help and with professional credit repair and restoration services. Juan is the president and founder of www.AttractiveCredit.com and www.ActtractiveCreditSecrets.com

How to Boost Your Credit Scores Fast

How to Boost Your Credit Scores Fast

You Can Control Your Credit Scores

In a moment I will share some easy and practical ways to boost your credit scores. But before getting into these powerful credit repair techniques let’s review a few facts. You might be surprised.

Phony Credit Score Alert

There are many reasons to check your credit scores; occasional monitoring, credit repair preparation, or in advance of making loan application. Most people that decide to check their credit scores on the web end up at one of the three credit bureau websites. The three major credit bureaus are Experian, Equifax, and TransUnion, and they all offer credit scores. Oddly enough, these credit bureau scores are not the same scores lenders use.

Think about this for a second. Say that you will be applying for a loan in the near future and want to see where you stand. You go online and buy your scores from Experian and they look great. So, off you go to get your loan, happy and confident. And the lender runs your credit and tells you that your scores are too low. In fact he shows you your scores and they are completely different from the scores you purchased from Experian. Get the picture. Crazy, huh? What’s up with this?

FICO is the Score that Counts

Lenders use a credit scoring formula developed by Fair Isaac Corp called the FICO score. The three major credit bureaus provide these FICO scores to lenders, either directly, or through credit resellers. But if you or I purchase our scores from the credit bureaus we get something altogether different; we get the credit bureau’s proprietary scores, which can be radically different from the FICO scores lenders see.

The reason is money. The credit bureaus make millions by selling these numbers which consumers erroneously believe are the real deal. This is a sadly deceptive business, and completely indefensible. There is only one place where you can get genuine FICO scores, MyFICO.com, the Fair Isaac website. No one else sells the genuine scores to consumers. Enough said. Let’s do a little credit repair.

The Power of Balance Reduction

Recent FICO score modifications have put an increased emphasis on credit card balances. The importance of this cannot be overstated. Way too many people have been blindsided by precipitous drops in their scores due to high card balances. As crazy as it seems you can now have an immaculate payment history and have a crappy credit score. That’s right, even a full decade of perfect credit will not offset the terrible effect of a maxed out balance. Here’s the deal.

FICO measures the relationship between your balance and your limit. Specifically there are five trigger points to be aware of: 20, 40, 60, 80, and 100 percent usage. The lower the better, and if you go over the 100 percent mark you can expect a drop of 100 points in your score. Ouch. Anyway, the good news is that when you pay your balances down, your score will go up. If you want real score improvement, get your balances under the 20 percent mark and watch the credit repair magic happen. You’ll love it.

Authorized User Accounts

Have your mom call one of her credit card companies and ask them to add you to her account as an authorized user. She should tell them that she wants you to have a card in case of emergencies. About 60 days later the account will show up on your credit report and the entire credit history of the card will be included in the calculation of your credit score. You do not have to use the card; in fact you can give it back to your mom when you get it.

This little credit repair trick can really boost your credit scores quickly. Just make sure that the history on the card is excellent. There would be no point in adding yourself to a bad card. And, as a little caveat, don’t even think about purchasing an authorized card status online. The latest release of the FICO formula includes a block on purchased card memberships, so it would be a waste of money.

Consult a Credit Repair Expert

If you want more powerful credit repair tips that can really pump up your scores pick up the phone and call a professional. A credit repair professional will evaluate your three credit reports and customize a plan just for you. Credit score optimization can pay amazing dividends and is worth every bit of effort you put into getting it done right. Make the call today.

Posted by Editor on Tuesday, June 15, 2010 at 2:05 pm
Filed under Credit · Tagged with Boost, Credit, Fast, Scores

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