The Secret to Improving Credit

ome people are surprised to find out that their credit scores can often be improved significantly without disputing even one item on their credit reports.

When a lot of people think about "credit repair", the main thing they think about is "removing negative items." If all of your credit repair information came the mainstream media, it might seem as if that were all there were to it.

In reality, there is a lot more to a credit score than just "derogatory" items. (And there is a lot more to credit repair than just removing them.)

According to www.myfico.com, around 30% of your FICO score is made up of what we call credit utilization, or your "debt to credit ratio."

Believe it or not, it is often possible to get a significant bump in your credit score by doing nothing else but adjusting your debt to credit ratio.

There are two basic problems tied to credit utilization that could be affecting your score:

1. Too much credit available (this is rare).

2. Not enough credit available.

The more common scenario is #2, in which a person is using too much of their available credit.

For these people, they can often achieve a score increase by simply improving their debt to credit ratio.

This is normally done in one of two ways:

1. Paying off a certain (sometimes large) amount of debt in order to reduce the amount of credit you're using.

2. Opening up a new credit line to increase your amount of total available credit.

For most people, option 2 is easier to accomplish than option 1.

When you open a new credit lien, the "credit limit" of that line gets added to your total available credit.

Here's an example of how it works:

If you have one $10,000 credit card and your balance is $8,000, your debt to credit ratio is 80%. This means your credit utilization is HIGH and it could be hurting your score.

Let's say you open a new credit line in the amount of $10,000. Now you have 2 $10,000 credit lines, and your debt to credit ratio has gone from 80% to 40% overnight!

Suddenly, you're using a lot less of the credit that is available to you. You're debt to credit ratio (or credit utilization) has improved, which should result in a higher credit score.

For people with bad credit, getting approved for an extra $10,000 in credit might seem next to impossible.

The key is to look for the right kind of credit to apply for.

There are four basic kinds of credit that people with bad credit can usually get approved for:

1. Secured credit cards
2. Sub-prime merchandise cards
3. Sub-prime Visas or Mastercards
4. Store credit cards and credit lines

Of these choices, sub-prime merchandise cards and store credit cards are the best choices for improving your debt to credit ratio because they usually come with much higher credit lines than a secured credit card or sub-prime Visa or MasterCard.

And when you're trying to improve your debt to credit ratio, the size of the credit limit is important.

The other important thing to know is whether the card reports positive credit to the credit bureaus. In order to be useful, a card has to report to at least one of the three major credit bureaus. (It's best if it reports to all three, but a card that reports to at least one can still be used as a foot in the door to important pre-approved offers.)

In this article we've explained just one way that you can improve your credit score without actually disputing anything on your credit reports. There are more methods like this available, and those are covered in detail in the Credit Repair Intelligence System.

Tip of The Day!

Scores are calculated using information in your credit files that are maintained by nationwide credit reporting agencies like Equifax, Experian, and TransUnion. The vast majority of consumers have errors on their credit reports that go undetected for years because they’ve never taken the time to review them.

If data in your credit reports is negative or incorrect, it’s probably dragging down your credit scores without you knowing. However, it’s easy to dispute errors and get your credit reports corrected. Start by visitingannualcreditreport.com to view or print each of your 3 free credit reports.

Saving Time Benefits

Credit repair companies can provide the expertise to ascertain the best and a lot efficient plan that you can choose to use clear your credit file, manage your existing debt properly, and optimize your scores. There are many benefits of employing among the reputable credit repair businesses positioned on the internet. The task will take a significant amount of experience and legal competence. If you don't have plenty of time available you will possibly not be capable of master the intricacies associated with finding the undertaking done properly. along with the advantages continue well in the evening initial stage

How An Consolidation Loan Can Be Helpful

A consolidation loan will help you to group together all your debts, but it must be coupled with self repair techniques in order to really get your credit score back up where you desire it to be.

5 WAYS TO KNOW YOU GOT THE WRONG CREDIT CARD

1. You carry a balance with a high interest rate
 2. You have a secured credit card and your credit score is up. 
3. You pay an annual fee but don't take advantage of the perks. 
4. You don't have a dedicated card for business expenses. 
5. You collect travel rewards and never go anywhere

What Is a Good Credit-Building Time frame?

Starting over or starting from scratch with your credit? Be patient.

Building up a brand-new credit history or re-establishing credit after some credit missteps (such as late payments) takes time.

Give yourself at least a year to see some progress with your credit.

Payment history accounts for 35% of a credit score and establishing or re-establishing your credit with a solid year of on-time payments on a credit account, such as a credit card or credit builder loan, is a good way to go.

Building Credit with a Credit Card

A secured credit card is a good credit-building option. With a secured card, you make a deposit with a lender and your deposit is used as a credit line.

Make sure to choose a secured card from a lender that reports to all three major credit reporting agencies — Equifax, Experian and TransUnion.

To build credit with a secured card, make a series of on-time monthly payments and use no more than 10% of your credit line. Stick to small purchases that you can pay off with ease each month.

After a year or more of on-time payments, reach out to your lender about applying for an unsecured credit card account.

Credit Builder Loans

Another credit building option is to apply for a credit builder loan from a credit union. These loans, which have terms of six to 18 months, are good alternatives to credit cards and good credit building tools in their own right.

With a credit builder loan, the money being borrowed is placed in a savings account.  And once you pay off a credit builder loan through a series of payments over the course of the six- to 18-month term, you will get access to the money in the savings account.

Loan amounts for credit builder loans can be small, just $500.  So there’s no need to borrow a lot of money to build a healthy credit record.

For maximum credit-building, choose a credit builder loan that reports to all three credit reporting agencies.

How to Get a Secured Credit Card

If your credit is damaged, or if you never established credit at all, a secured credit card might be the thing for you. With a secured card, you put down a deposit, usually $200 to $500, which becomes your collateral. Manage the card responsibly and you’ll get the deposit back.

First: Learn Your Options

Before you shop for a secured card, find out your credit score to learn what you qualify for. Why? Well, rejection stings, for one thing.

But more importantly, knowing your credit score helps you determine which cards you’re more likely to qualify for. The better your credit, the more options you’ll have, including money-saving choices not available to those with credit scores lower than yours.

Not sure if your credit is good, bad or fair? That’s not unusual. Here are some tools to help you find out:

• Subscribe. Numerous banks and other companies sell credit scores as part of a subscription to a monitoring service sold to help guard against identity theft. Or you can shop for a credit monitoring service. This may be helpful if you want to monitor your progress with more than one credit reporting agency.

Compare Secured Cards

Just as if you’re buying a car, compare the features and costs of each card. Look at the fine print on each card, including:

• Credit reporting. Get a card that builds your credit by reporting to not one or two but all three of the major credit reporting agencies – Experian, Equifax and TransUnion.
• Graduation features. Will the card let you raise your credit limit over time, either by increasing the size of your down payment or by earning a higher limit through responsible use of the card?
• Annual fees. Unfortunately, you may not be able to avoid annual fees. Make sure you do your research and compare annual fees across cards to find the best deal.
• APR. The annual percentage rate shows the card’s interest rate on your unpaid balance. APR can vary for different services – cash vs. purchases, for example. It may change, too. You might, say, get a low introductory rate that bumps up after six months. Be aware of any potential changes so they don’t take you by surprise.
• Other fees. Avoid application fees, if possible. Some cards have them, others don’t. Watch for and compare the host of other possible fees, including fees for balance transfers, over-limit charges, late payments, cash advances and other costs.
• Rules. Do the tedious but important due diligence: Read and compare the detailed rules accompanying each card so you don’t get tripped up by incurring surprise fees and possibly further damaging your credit.