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How to Quickly Raise Your
Credit Score by as much as 100 Points.
1. GET RID OF YOUR COLLECTION ACCOUNTS.
Did you know that paying a collection account can actually
reduce your score? Here’s why: credit scoring software
reviews credit reports for each account’s date of last
activity to determine the Impact it will have on the overall
credit score. When payment is made on a collection account,
Collection agencies update credit bureaus to reflect the
account status as “Paid Collection”. When this happens, the
date of last activity becomes more recent. Since the
guideline for credit scoring Software is the date of last
activity; recent payments on a collection account damages
the credit Score more severely. This method of credit
scoring may seem unfair, but it is something that must be
worked around when trying to maximize your score. How is it
possible to pay a collection and
Maximize your score? The best way to handle this credit
scoring dilemma is to contact the Collection agency and
explain that you are willing to pay off the collection
account under the Condition that the all reporting is with
drawn from credit bureaus. Request a letter from the
collector that explicitly states their agreement to delete
the account upon receipt/clearance of
your payment. Although not all collection agencies will
delete reporting, removing all references to a collection
account completely will increase your score and is
certainly worth the involved effort.
2. GET RID OF YOUR PAST DUE ACCOUNTS.
With in the delinquent accounts on your credit report,
there is a column called “Past Due”. Credit score software
penalizes you for keeping accounts past due, so Past Dues
destroy a credit score.
If you see an amount in this column, pay the credit or the
past due amount reported.
3. GET RID OF YOUR CHARGE OFFS AND LIENS.
Charge offs and liens do not affect your credit score when
older than 24 months.
Therefore, paying an older charge off or a lien will
neither help nor damage your credit score. Charge offs and
liens within the past 24 months severely damage your credit
score. Paying the past due Balance, in this case, is
very important. In fact, if you have both charged off
accounts and Collection accounts, but limited funds
available, pay the past due balances first, then
pay collection agencies that agree to remove all references
to credit bureaus second.
4. GET RID OF YOUR LATE PAYMENTS.
Contact all creditors that report late payments on
your credit and request a good faith adjustment that removes
the late payments reported on your account.
Be persistent if they refuse to remove the late payments at
first, and remind them that you have been a good
customer that would deeply appreciate their help.
Since most creditors receive calls within a call center, if
the
Representative refuses to make a courtesy adjustment on
your account, call back and try again with someone else.
Persistence and politeness pays off in this scenario. If you
are frustrated, rude, and unclear with your request, you are
making it very difficult for them to help you.
5. CHECK YOUR CREDIT LIMIT(S) AND
EVENLY DISTRIBUTE THE BALANCES YOU ARE CARRYING.
Make sure creditors report your credit limits to bureaus.
When no limit is reported, credit scoring software scores
the account as though your current balance is “maxed out”.
For example, if you know that you have a $10,000 limit on
your credit card, make sure that the limit appears on the
credit report. Otherwise, your score will be damaged as
severely as if you were carrying a Balance of the entire
available credit. Credit scoring software likes to see you
carry credit card balances as close to zero as possible. If
it is difficult for you to pay down your balances, read the
following guidelines to maximize your score as much as
possible under the circumstances:
There are different degrees that scoring software can
impact your score when carrying credit card balances.
Balances over 70% of your total credit limit on any card
damages your score the most. The next Level is 50% of
your balance, then 30% of your balance.
In order to maximize your score without having to pay down
your balances, evenly distribute your credit
card balances among all of your credit cards,
rather than carry a large balance on one credit card.
For example, if you are carrying a $9000 balance on a
credit card with a $10000 limit, and you have two
other credit cards with a $3000 and $5000 limit,
transfer your balances so that.
You have a $1500 balance on the $3000 limit card, a
$2500 balance on the $5000 limit card and a $5000
balance on the $10000 limit card. Evenly distributing
your balances will maximize your score.
6. DO NOT CLOSE YOUR CREDIT CARDS.
Closing a credit card can hurt your credit score, since
doing so effects your debt to available credit ratio.
For example, if you owe a total credit card debt of $10,000
and your total credit available is $20,000, you are using
50% of your total credit. If you close a credit card with a
$5,000 credit limit, you will reduce your credit available
to $15,000 and change your ratio to using 66% of
your credit. There are caveats to this rule: if the account
was opened within the past two years or if you have
over six credit cards. The magic number of credit card
accounts to have in order to maximize your score is between
3 and 5(although having more will not significantly damage
your score). For example, if a card was opened within the
past two years and you have over six credit cards, you
may close that account. If you have more than six department
store cards, close the newest accounts. Otherwise, do not
close any at all.
7. BECOME AN AUTHORIZED USER.
If you have a short and limited credit history you can
ask someone who is a primary account holder to add you to
their account as a joint account holder or an authorized
user. When added, the primary account holder’s credit card
will appear on your credit report. Credit scoring software
Will treat the added account as though it is your account
and you will benefit from the low balance and the long
payment history for that account.
It is important to remember that being an Authorized user is
helpful for your credit score only if(1) the person is
carrying debt below 10% of the credit limit and(2) has had
good payment history on the card for seven years or longer,
the longer the history, the better. Being an authorized
user is potentially detrimental to your credit Score if,
for example, the primary cardholder carries a high balance
on the card and has had it less than five years.
8. KEEP YOUR OLD CREDIT CARDS ACTIVE.
15% of your credit score is determined by the age of the
credit file. Fair Isaac’s credit scoring software assumes
people who have had credit for a longer time are at less
risk of defaulting on payments. Therefore, even if your old
credit cards have horrible interest rates, closing those
cards will decrease the average length of time you’ve had
credit. Use the old card at least once every six months to
avoid the account rating to change to “Inactive”. Keeping
the card active is as simple as pumping gas or purchasing
groceries every few months, then paying the balance down. An
inactive account is ignored by Fair Isaac’s credit coring
software, so you won’t get the benefit of the positive
payment history and low balance that card may have. The one
thing all credit reports with scores over 800 have in common
is a credit card that is twenty years old or older. Hold on
to those old cards, trust me!
Preparing credit is a slow and time consuming process.
Full knowledge of your credit profile and how it represents
you to creditors and credit bureaus is pivotal to full
credit restoration success.
Credit bureaus always advise individuals that they have a
right to dispute their own credit files, but when the rights
of the Credit Bureaus slow you down; You know where to
ask for help.
http://www.edwardjamison.com
http://www.jamisonlawgroup.com
http://www.getcreditsavvy.com
http://www.creditreportingparadigm.com
My personal Recommendation for Help
with Credit Repair >>
Pro Family Financial |
