October 24, 2018 · Loan Agreements · (No comments)

By Faranak Groves

1. Pay down or pay off all of your credit cards. This will help your credit score more than paying off any installment loans that you may have will because the FICO model and Vantage scoring system both place more weight on credit card debt. For this reason you will want to keep each of your credit cards and your total revolving line all under 25%. In order to do this you will need to forget about paying off your high interest rate credit cards first and opt to pay down the balances those credit cards where you will be able to see the most improvement instead.

2. You shouldn’t use your entire credit line every month, even if you pay off your full balance each month. This is because your available credit is averaged over a billing cycle, which can sometimes be less than 30 days and so if you use your entire balance each month your credit score is going to plunge. Even if you are using your business credit card to purchase goods and supplies for your business, you still need to be careful. These credit cards will show up on your personal credit report because you must personally guarantee your personal credit card. So, if you have to use all of your credit cards, it may be time to think about getting another credit card so that you can spread things out some. 3. Make sure that your credit report is correctly reporting your credit limits for your credit cards. If it isn’t, you will need to contact your credit card issuer and ask them to update this list. It is also possible to challenge the limits with the credit bureaus. 4. If a credit card issuer doesn’t report your credit limit, then don’t use them. This is usually only a problem whenever you are using a secured credit card but you should also know that both American Express and Capital One don’t report credit limits either. Instead, they will simply use your highest balance to determine your credit limit. This will make you look like you are maxed out though. 5. Talk to a family member or a friend whom you trust to see if they are willing to add you to one of their old credit cards that they haven’t used in a while as an authorized user. The reason this will help is because the older your credit history is, the better it will look. For instance, if someone agrees to add you to a credit card that they have had for 20 years you will see your credit score dramatically increase. You don’t even have to have this credit card in your possession either in order to see this great increase. 6. If you have been a good customer for several years but encountered a rough spell during which you missed a payment, then you could ask your creditor to erase this negative listing. You simply need to write the creditor a goodwill letter with this request therein. While there is no guarantee that your creditor will do this for you, a lot of people have been successful doing this. 7. Consider entering into a “rehab program” if you have a student loan that you have defaulted upon or even if you have just missed a few payments on it. This will help you to get back onto track within about 12 months as this is a short-term strategy. Your credit status will be upgraded to “Paid as Agreed” by Sallie Mae once you have made at least 12 payments on time. 8. It is important to dispute any old negatives. For instance, if your insurance company never completely paid a medical bill and thus it went into collections, you will want to protest it as being unjust by contacting the credit bureau and claiming that it is “not mine.” The older and smaller the collection account, the more likely it is that the collection agency will not have updated their information with your correct information and thus they will not be able to show proof that this really is your bill. 9. Set up an agreement with a debt collection agency whereby they will remove a debt from your credit report if you pay it. This is known as “Pay for Delete” and works great whenever you owe $500 or less, especially if it is a medical debt. It also works well with those banks who have gone through major mergers within the last 10 years or who have been purchased by other banks. However, you should make sure to get the agreement in writing before you pay any money and then only send a money order to them once they do agree. 10. Target any “easy” errors that are on your credit report and can bring you big bang for your time and money. This includes: a. Negatives such as charge-offs, collections and late payments that don’t belong to you. b. Any accounts that are not listed as either “Current” or “Paid as Agreed” if you have paid them on time or in full. c. Accounts that are listed as unpaid but were included within a bankruptcy. d. Negative items that are more than 7-years-old and thus should have automatically been removed from your report. e. Any account that is list as “Closed by the Credit Grantor” whenever it hasn’t been. The first three items are concerned with paying down your credit balance because high credit balances will kill your credit score even if you have what is otherwise considered to be perfect credit. This is because it is weighted very heavily whenever your credit score is determined. For this reason, you will want to take special care to get these balances down.

About the Author: farnak goves has 20 years plus experience in the world of finance and credit repair. for more information and tips visit her site houseofrapidcreditrepair.com

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