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Credit Repair: How to Raise Your Credit Score

Jul 30, 2008
The Word is Out

The word is out. Unless you are independently wealthy and can pay cash for everything, your credit score will determine the cost of every dollar you borrow, and consequently, the quality of your life. A nationally recognized credit repair explains how to raise your credit score. It's easier than you may think!

Get the Big Picture

Do you want to have fantastic credit scores? Would you like to be approved for the lowest cost financing available when you purchase a home or an automobile? If so, you need to understand the factors that have the greatest impact on your credit scores - and how to control them. Credit repair can make a dramatic difference in your life; just take one step at a time.

Open New Credit Card Accounts

Credit scores take both the positive and the negative items on your report into consideration. Effective credit repair requires a balanced approach focused on cleaning up negative issues and building positive credit simultaneously. If you don't have any open accounts in good standing you should open a couple of new accounts as soon as possible. Secured cards are an excellent option if you have had credit problems in the past.

Watch Your Balances

Credit cards are the most powerful credit repair tool available. But they can be your downfall too. It's all about your balances. High balances can ruin your credit scores, while low balances can propel your scores to new heights. The FICO scoring model recognizes five different balance-to-limit ratios which measure the relationship between your balance and your high credit limit. The ratios are 20, 40, 60, 80, and 100 percent. Pay your balance down to below 20% of your high credit limit and watch your scores take off. But let your balance run up to the max and you may see 100 points come off your score. Just remember, the lower the balance the higher the score.

Avoid Store Cards - Sort Of...

Everyone loves a discount. So when the salesperson offers a discount if you open a new store card you may be tempted. Sometimes it makes sense. But if you plan to apply for a loan anytime soon you should decline the offer. Store cards have a funny way of sending your credit scores into a nose dive. This is because they usually involve a combination of an inquiry, a brand new account, and a new balance equal to the high credit limit. These three things combined are deadly. On the other hand, there is nothing wrong with saving money! Just make sure that you don't need your credit score to be at its best in the next few months.

Clean Up Your Student Loans

Unlike other forms of debt there is no statute of limitation for student loans. This means that they are collectable forever. And the longer you ignore them the worse it gets. Are you behind on your student loans? Do something about it right now. But make sure you know your rights! Call the Student Loan Ombudsman Office at (800) 557-2575. They are there to help you understand your options. They will explain how you can rehabilitate or consolidate your student loans. They will also explain that you have the right to affordable payments and even deferment if you cannot afford repayment at this time. Pick up the phone. Include your student loans in your credit repair effort today!

Remove Old Collections

Are there collections on your credit report? Too many people make the mistake of believing that if it is on their report it is correct. Credit repair requires a healthy dose of skepticism. Don't believe your eyes. Collections change hands regularly. Did you know that collectors who do not currently own the debt are not allowed to report it? There is a high probability that older collections should not be on your credit report. And if you see more than one collection for the same debt, at least one of them should not be there. Challenge those collections. Watch your scores take off.

Call Mom - Last Chance for Authorized User Accounts

Want a quick increase in your credit scores? Here is an easy credit repair trick. Call mom, or dad, or anyone you know that has excellent credit. Have them contact two of their credit card issuers and add you as an authorized user. You don't have to use the card, and your donor can remove you at anytime. Within two months the account will appear on your credit report and your credit score will enjoy the benefit of your donors perfect account history for that account. Just keep in mind that this is not a long term fix. The new FICO scoring model has eliminated this loophole and the three credit bureaus will eventually adopt the new model. But it's still good credit repair medicine!

Confused? Hire a Professional

Credit repair can be confusing. But there is no need to struggle along on your own. Pick up the phone and call a few credit repair services. Choose one that you are comfortable with and let them take over. A credit repair professional will make sure that everything possible is being done to clean up your credit report and optimize your credit scores. But don't wait. The sooner you start the sooner you will be able to experience the benefits of your credit repair effort. Good luck!

Copyright 2007 James W. Kemish. All Content. All Rights Reserved.
About the Author
Jim Kemish, a nationally recognized credit repair and restoration expert, is the president of Sky Blue Credit, a leading credit repair service since 1989. Jim is also the president of Power Mortgage, a Florida mortgage company.
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