Submitted by Naomi M on Tue, 10/02/2007 - 16:21.
Tip 5 – Pay Down High Balances on Unsecured Debt – But Don’t Pay Them Off - What?
Being “maxed out” on your credit cards is a red flag to lenders that your spending may be exceeding your income and can lead to future credit problems. Your credit card balances near the credit limit can mean as much as 35% of your low credit score.
On the other hand, never pay off your revolving debt entirely. Why not? If you pay off your debt entirely and have a zero balance, how can you show the lender or creditor that you can manage money? It no longer exists. What your credit score demonstrates, in part, is your ability to reliably and on-time, manage your debts.
Tip 6 - Consolidate Your Debt On a Higher Limit Credit Card
It’s not how much credit card debt you have, but how much credit card debt you have in comparison to your card limit. Keep your balance around 75% or less of your credit limit.
For example, if you have three credit cards maxed out at $5,000 each and you can get a $20,000 credit limit credit card, transfer the balances onto the $20,000 card to reduce your balance to credit limit ratio to 75%.
Tip 7 – Have Three to Five Lines of Credit
Especially when applying for a mortgage loan, lenders like to see between 3 to 5 “seasoned” credit lines. This is ideal. More than that may be seen to be excessive.
Tip 8 – Don’t Close Accounts
Even if you pay off your credit card balances and other revolving debt, don’t close the account. The longer an account is open that shows PAID ON TIME, the better. This “seasoning” of accounts makes up part of the calculation for your credit score.
Tip 9 – Mix It Up
A variety of credit types open at the same time also reflects well in your credit score. In other words, get installment loans like a car loan or furniture store installment contract. Get revolving credit like VISA, Mastercard, department store cards, Chevron card, etc. This demonstrates your ability to pay both longer and short term debt and a “variable” monthly payment on your credit cards.
Tip 10 – Pay Collections For Faster Results
Think the way a computer “thinks” People that are about to default on their loans start by getting behind on their phone bills, credit cards, car payments, etc. Any unpaid collection or 30+ day late on your revolving accounts will be about 35% or more (that's 1/3rd) of your low credit score.
The good news is that paying collections is one of the fastest ways to improve your credit score. Why? Remember that “Do you delete?” question I mentioned earlier? You have a 50% chance that the collection company will say, “Yes.” Sometimes a collection agency even has the up-to-date computer system that can remove your debt from the credit bureaus immediately. If not, then mail the deletion letter to the appropriate credit bureau.
Tip 11 – Dispute Your High Balances
Balance information is often 60 to 180 days old, especially on vehicle loans. For example, your original car note balance was $10,000 and you’ve paid the balance down to $5,000. However, the credit bureaus are still reporting an $8,000 balance. Car companies often don’t have updated computer software to update your credit information on time to the bureaus. Because of the reporting delay on current lower balance, you may not be able to qualify for loans because of these higher “old” balances. Your remedy?
Dispute the inaccurate balance with the credit bureaus as instructed earlier.
Tip 12 – Call Your Creditors and Ask Them To Update Your Balance With the Credit Bureaus
Some of the larger creditors like MBNA, Visa or American Express can quickly update your balances to the credit bureaus if you really need them to. Instead of waiting 30 days after your payment due date, call them and ask them in a friendly and respectful tone to help you out because you are applying for a home or car loan and need a better credit score with an updated balance on their loan. They will likely, in kind, give you a “little help my friend.”
There you have it – 12 Surefire Tips to Boost Your Credit Score.
If you decide you need more help, check out the Expert Credit Repair "How To" Guides.
12 Surefire Tips To Boost Your Credit Score – Tips 5 to 12
|
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| Legally
Remove Derogatory Accounts bankruptcies, slow pays, collections, tax liens, judgments, evictions, etc See Credit Secrets Bible |
| Sample
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| Overwhelmed
with Debt Use 5 unique letters to pay off bills for 35-cents on the dollar. Avoid BK, avoid hiring a debt consolidation service See Credit Secrets Bible |
| Sue
Your Creditors Use the Law. Get even with stubborn creditors, collection agencies. Collect $1,000s in fines See Good Credit is Sexy |
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tracts using the law See Credit Secrets Bible |
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Seasoned Credit in 45 Days Get up to $20K of
unsecured credit and up to 20 years of credit history See Credit Secrets Bible |
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with your mortgage company See Credit Secrets Bible |
Tip 5 – Pay Down High Balances on Unsecured Debt – But Don’t Pay Them Off - What?
Being “maxed out” on your credit cards is a red flag to lenders that your spending may be exceeding your income and can lead to future credit problems. Your credit card balances near the credit limit can mean as much as 35% of your low credit score.
On the other hand, never pay off your revolving debt entirely. Why not? If you pay off your debt entirely and have a zero balance, how can you show the lender or creditor that you can manage money? It no longer exists. What your credit score demonstrates, in part, is your ability to reliably and on-time, manage your debts.
Tip 6 - Consolidate Your Debt On a Higher Limit Credit Card
It’s not how much credit card debt you have, but how much credit card debt you have in comparison to your card limit. Keep your balance around 75% or less of your credit limit.
For example, if you have three credit cards maxed out at $5,000 each and you can get a $20,000 credit limit credit card, transfer the balances onto the $20,000 card to reduce your balance to credit limit ratio to 75%.
Tip 7 – Have Three to Five Lines of Credit
Especially when applying for a mortgage loan, lenders like to see between 3 to 5 “seasoned” credit lines. This is ideal. More than that may be seen to be excessive.
Tip 8 – Don’t Close Accounts
Even if you pay off your credit card balances and other revolving debt, don’t close the account. The longer an account is open that shows PAID ON TIME, the better. This “seasoning” of accounts makes up part of the calculation for your credit score.
Tip 9 – Mix It Up
A variety of credit types open at the same time also reflects well in your credit score. In other words, get installment loans like a car loan or furniture store installment contract. Get revolving credit like VISA, Mastercard, department store cards, Chevron card, etc. This demonstrates your ability to pay both longer and short term debt and a “variable” monthly payment on your credit cards.
Tip 10 – Pay Collections For Faster Results
Think the way a computer “thinks” People that are about to default on their loans start by getting behind on their phone bills, credit cards, car payments, etc. Any unpaid collection or 30+ day late on your revolving accounts will be about 35% or more (that's 1/3rd) of your low credit score.
The good news is that paying collections is one of the fastest ways to improve your credit score. Why? Remember that “Do you delete?” question I mentioned earlier? You have a 50% chance that the collection company will say, “Yes.” Sometimes a collection agency even has the up-to-date computer system that can remove your debt from the credit bureaus immediately. If not, then mail the deletion letter to the appropriate credit bureau.
Tip 11 – Dispute Your High Balances
Balance information is often 60 to 180 days old, especially on vehicle loans. For example, your original car note balance was $10,000 and you’ve paid the balance down to $5,000. However, the credit bureaus are still reporting an $8,000 balance. Car companies often don’t have updated computer software to update your credit information on time to the bureaus. Because of the reporting delay on current lower balance, you may not be able to qualify for loans because of these higher “old” balances. Your remedy?
Dispute the inaccurate balance with the credit bureaus as instructed earlier.
Tip 12 – Call Your Creditors and Ask Them To Update Your Balance With the Credit Bureaus
Some of the larger creditors like MBNA, Visa or American Express can quickly update your balances to the credit bureaus if you really need them to. Instead of waiting 30 days after your payment due date, call them and ask them in a friendly and respectful tone to help you out because you are applying for a home or car loan and need a better credit score with an updated balance on their loan. They will likely, in kind, give you a “little help my friend.”
There you have it – 12 Surefire Tips to Boost Your Credit Score.
If you decide you need more help, check out the Expert Credit Repair "How To" Guides.
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