The most basic fundamental of credit repair is knowing your credit score. Knowing what affects your credit score is even more important. Knowing what to do to improve your credit score is even more important.
Article source: Know your credit score, and take steps to raise the number by Personal Money Store
Getting your credit score is free
Due to a financial reform, helping your credit score is easier. Free credit report services are all over the internet. These reports didn’t contain your credit score, until now. Extra was paid for that. But part of the most recently passed financial reform bill makes certain that you are able to get a free credit report that consists of your credit score once per year.
Low credit score?
A lot of people don’t know how they affect their credit score. For instance, it was reported by Wallet Pop that many people assume if they pay their bills on time, their credit score is good. The truth is, even if you always pay on time, when your credit cards are maxed out, your score is lower than it should be. Risky behavior is shown with borrowing to the limit. To improve your credit score, tackling excess credit card debt is your first priority.
Settle credit cards first with credit repair
To raise your credit score, pay off credit card debt first. You will find two types of debt. Installment debt is secured by many collateral, like a car loan. Your credit card balances are revolving debt. For many people, credit card debt revolves forever, which is not good for the credit score. Since credit card balances appear to be unsecured, credit report companies like FICO say they’re more risky than short term loan. So paying off your credit cards will do more to raise your credit score than paying down your car.
College agencies should be paid off last
Your score is already hurt if you’ve been taken to collections. The numbers won’t change by paying the collection agency. It was reported by Bankrate.com that by the time your debt goes to collection, your creditor has already written you off. Although paying the collection agency will end the harassment, the payment won’t erase the delinquency from your credit report. Remember that a surprise call from the collection agency can result from missed payments on everything from utility bills to library fines. Avoiding collections will protect your credit score.
No to charge cards
To keep your credit score from dropping quite a bit, keep refusing that charge card every department store tries to sell you. This is because opening and closing credit accounts can lower your credit score. Wallet Pop said FICO credit bureau research has found that opening any type of credit account is automatically seen as more credit risk. If you end up getting that charge card and pay it off in full, your credit score will rebound in a few months, but it won’t rise above the level it was before you bought that new outfit.
Do not cancel any credit cards
It looks like the deck is stacked against you when it comes to credit repair. Especially when canceling credit cards can lower your credit score. When canceled, the line of credit with credit cards goes away. With less credit accessible, your credit score goes down. Instead of canceling, just zero the credit card out and throw it with your dresser drawer. New credit card rules prohibit all of the credit card companies from canceling cards you do not use–which used to hurt your credit score–so you do not have to worry about that anymore.
Try to use installment loans wisely
Applying for an installment loans for credit repair could be risky, but it can work to pay back credit card debt with personal discipline. For those who have a bunch of maxed out credit cards, the new installment loans won’t negatively impact your credit score too badly. For this strategy to lower your credit score, you have to make yourself settle the credit card debt with the installment loan, and then you will have to throw the credit cards in the drawer until the installment loan is paid off.
Discover more about this topic here:
Wallet Pop
walletpop.com/blog/2010/07/07/good-credit-score-secrets/
Bankrate.com
bankrate.com/finance/debt/3-easy-ways-to-rebuild-your-credit.aspx
