Your Credit Bureau Blog Blog

If you’re the kind of person that lives off borrowed money, as in cash that’s extended from different lending companies, you are lucky – why? Because you of all the billions of people out there have a deeper understanding of the importance of credit history. Everyone that patronizes the services of this creditors knows that having a good credit score is but of the utmost importance when it comes down borrowing money. But not all of them have good history; some even should be ashamed of the scores they got, which inevitably leaves them with one option: suicide. Not the type of suicide where as to intentionally get yourself into a fatal accident, cut your wrist, or jump off a cliff into a pool of sharks (very effective method to get killed), but the type where you pay more than what you have to.

People with poor FICO scores know this; they have to put up with high interests rates and agree to ridiculous terms just to pull out a loan. I feel for you, and I completely understand how frustrating it can be. That’s why today I’m going to share with you a little trick you can use to make good with your creditors, by repairing your credit through a certain method – want to know what it is? Come closer, I’ll tell you: secured credit cards. Nothing fancy here, but it’s a sure fire way to build your credibility. Do you have any idea what it is anyway? If you don’t listen to this: secured credit cards are of course a credit cards, but they were “engineered” specifically for chumps with poor rating, or no rating at all.

The good thing here is that it functions the same way any credit card would, only with a stricter limit. Whatever you put in this security deposit, it’s generally the exact same amount you get to spend. Let’s take a look at the example that’s coming up, so that you can better understand what I mean: if you place $1000 into the account, you will be given a spending limit of $1000 dollars. This is a safety precaution against default payments; they anticipated the tardiness of people when it comes to paying, that’s why no withdrawals can be made while the secured credit account is open – clever little monkeys.

But hey, that’s good news for you, why? The reason behind that is you get better control over your expenses. Spending money you don’t have, as rendered by the regular cards, gets you into debt. A man given the opportunity to get his hands on goods will do so, especially if he’s given more than a month to pay for it. He’ll do so, even though he feels that paying it all back won’t be difficult. That’s when man finds himself deeper and deeper into the hole, to the point where there’s no way out. That then results to lower his score drastically, and then finds it harder and harder to apply for the loans he’ll really need.

All that could have been avoided if he had gotten a secured credit card instead, right? Opening an account doesn’t just grant you better control over your expenses, but builds your credibility in the eyes of the credit companies. They view such as a sign of “responsibility”, which makes you more trustworthy, which can lower the rates and improve the terms you agree to.

Your credit score is your financial report card, but more than that it is an indicator of how responsible you are. It shows lenders, employers and landlords your ability to be trustworthy, manage money and stick to your end of the bargain when obtaining loans.

For that reason, your credit score can have big implications on your life. From being approved to an auto loan, to obtaining a mortgage at a fair rate. The higher the credit score, the easier it is to obtain loans at the best possible rates. When you have a score that is better than average, banks, lenders and creditors are willing to throw money at you with no questions asked and with flexible repayment terms.

Luckily, for someone who has a below average credit score, there are a number of steps they can take to improve their credit worthiness. The fastest way to raise your credit score, however, depends on your current situation.

The credit score is determined by the information that appears on your credit report. Some of the information has more weight than other data, so when working to raise your credit score you wan to start with those areas that have the greatest impact.

The individual’s credit history, for example, accounts for about 35% of your credit score. In other words, how good you are about paying your bills on time. Therefore, the best thing you can possibly to do instantly raise your credit score is to make sure you are making payments on time. But you also want to check your credit report to make sure you are not being falsely misrepresented… and chances are that your credit report is not accurate.

One out of every 4 credit reports has information on it that is inaccurate and damaging to the individual’s credit score. So the first thing you want to do is review your credit report and make sure there are no indications of late payments or delinquent accounts that are not actually true. If you find these, all you have to do is notify the credit reporting agency and they have 90 days to investigate and resolve the situation by law. Removing this false information will boost your credit score.

Double checking for accurate credit history on your report is one of the biggest ways you can boost your credit score. This can take a couple weeks to resolve and be reflected in your credit score. In the meantime, there are a few other tricks you can do to immediately improve your credit score.

With the influx of people who are worrying about their credit scores and their finances in general, it comes as no surprise that there are companies out there who are offering exclusive services to clean up or repair your damaged credit. While it may seem like such a simple solution to your credit woes, be warned – some of these companies are not what they claim to be.

Credit repair agencies claim to repair bad credit marks on your credit history. What you need to find out before committing to a service is how the company goes about making such repairs. There is a big difference between the items on your credit reports that make up a poor credit score and then there are items on the report that are genuine mistakes. If the company tells you then can remove all bad marks – walk away now. No one can remove information that show poor credit activities. To do so would be illegal.

On the other hand, you have the right to look at your credit report and file a request to remove any misinformation. If the credit reporting agency claims they can repair inaccurate information for you, know this – you too can do the same thing for free. All that is involved in this procedure is analyzing your credit report and noting all mistakes. You then have a right to file a complaint with the credit bureau that provided the report. The credit reporting bureau is then obligated to investigate the information from the original creditor within a reasonable period of time. If the creditor responds that the information is indeed correct, your report will not change. If the credit reporting agency gets no reply from the creditor, the incorrect information will be removed from your credit report.

While you can not remove poor credit activity from your credit report, you can ask your creditors to work with you to improve the information being reported to the credit reporting agencies. They may not all be cooperative but it is worth a try in order to improve your credit score.

For those people who simply do not want to go through the trouble of repairing there own credit reports, there are reputable companies who can do the repair work for you. Be sure before you commit to any one company, be sure they are a company in good standing with the Better Business Bureau and will work with you to truly help you repair your credit score and not just take your money. A good first red flag – if the credit repair agency denies you can do the above-mentioned steps on your own – know that they may not have your best interests at heart as they are not being honest with you. Also be aware and clear of how much it will cost to work with a credit repair company before signing on the dotted line.

Here are some other points that may raise some alert flags:

· Speak to you in terms that seem confusing and “over your head” with no real concern if you understand

· Do not tell you honestly about what your obligations or rights are concerning your credit.

· Tell you that they can repair all bad credit marks on your report.

· Last, but not least, if a credit repair company tries to convince you to apply for a new identity using an EIN number for credit purposes. This is very illegal and is not repairing anything.

It is no secret that if you skip a payment or pay bills late, your credit score will be lower than those who always pay everything before the due date. However, there are other financial mistakes that will also result in a lower credit grade. Actually, what you do not know can hurt you. Thus, below are some financial mistakes that you must avoid:

One of the financial mistakes people often make is shopping around for better interest rates. How can this be wrong? Well, the problem is how often lenders use your credit report. Every time you complete a loan or credit card application, you permit a creditor to pull your score. This is taken as an inquiry. Credit scoring models are using frequency of inquiries in computing credit score. Generally, those who have many inquiries have lower credit score than those with lesser inquiries.

Closing accounts is another major financial mistake you should avoid. Closing accounts suggests a new phase in your financial future and many people think that it proves they are committed to paying and avoiding the load of credit card debt. However, closing accounts may lower your credit score.

Closing a credit card account that you have already paid or you do not use anymore means removing some of the available credit. As you reduce the amount of available credit, the amount of credit you use increases, even if you do not spend more. As you increase use of available credit percentage, there is a decrease in your credit score.

What will happen if you leave an inactive credit card open until it falls off the credit report? Leaving a credit card account open after paying it off to prevent debt utilization percentage from increasing triggers the clock to start ticking. After 7 years, virtually all unused information will be deleted from the credit report. Of course, you do not want your good payment history be removed from your report. On-time payment history is used to calculate your score, and creditors use it to determine whether you are “grounded” or not. Thus, do not allow an inactive credit card with excellent good payment history to be removed from your report.

Here is one useful tip to have a high credit score: Use your card only once every two months to pay for items or dinner you will pay off completely once your bill arrives. Purchasing periodically will prevent the closing of an account. As a result, your credit report will show the good payment history and will help maintain a strong credit score.