Custom Search

Saturday, June 20, 2009

Tips on improving your credit score

While I don't agree with hiring a credit repair company to fix your credit, since most are scams, I do agree with the rest of the advice in this article by someone (the article doesn't identify who) that works for or owns a credit repair company. Here's the advice I do agree with:

"Beware of Store Cards

Department stores love to push their credit cards by offering a discount on your purchase if you sign up on the spot. This can be a good deal. But it is handy to know that store cards create triple trouble on your credit report. First, your score will be reduced because of the inquiry. Second, your score will be reduced because of the new account that will soon appear on your report. And third, store cards tend to give a low credit line, often just above your purchase amount. This can be terribly damaging as the FICO credit scoring model puts a lot of weight on the relationship between your balance and your high credit limit.

Watch That High Limit

I run a national credit repair company and speak to people all day long about their credit reports. One of the bits of advice that we like to offer our customers is to pretend they only have half the limit on their credit card that they really have. It takes some discipline to do this but it can make a big difference on your credit score. As soon as your balance exceeds fifty percent of your available limit your credit score will start to suffer. If your credit balances are currently close to your credit limits you might consider calling the credit card companies and asking them to increase your limit. You will be amazed at how fast this can make your score go up!

The Auto Shopping Credit Trap

I can’t tell you the number of times that we have looked at a credit report and seen multiple auto credit inquiries. When we ask our customer they inform us that they only went to two different dealers. Auto dealers will often shop for the best interest rate for you. If they shop with three auto finance companies you will have three credit inquiries. These multiple inquiries can have a significant impact on your score. This is not the auto dealers fault. After all, they are acting your best interest, but it is best to be aware of the possibilities. If you are shopping for a car I would suggest not providing your Social Security number until you are settled on the car you want.

[Ok, I don't agree with this one because I have been told numerous times by representatives of the credit bureaus and those (like me) that sue the credit bureaus often that multiple inquiries arising from a possible auto purchase are treated as one inquiry and thus do not overly affect your credit score.]

No More Mr. (or Mrs.) Nice Guy

Just about every day in the credit repair business we come across someone that was nice enough to co-sign for someone on a car loan. I’m sorry to say this, but chances are that if they need you to co-sign they will not make their payments on time. And this will kill your credit scores. I know that this is a tough call. It is hard to say 'no'. If this situation arises in your life I suggest an alternative approach. Go ahead and co-sign. But when the payment book arrives ask them to give it to you. Have them pay you instead of the auto finance company. You will make the payments on time. And maybe they will feel some extra obligation to make their payments to you on time as opposed to some anonymous auto finance company.

Don’t get complacent

Check your credit from time to time. In December of 2003 Congress passed the Fair and Accurate Credit Transactions Act (FACT Act) which, among other things gives you the right to get a free credit report from each bureau one time per year. This law was passed to protect you from the credit reporting errors that occur far too frequently. Don’t imagine that because you are doing everything right that the credit bureaus are reporting everything correctly. Get your reports and proof read them carefully. It’s your right."

To exercise that right, be sure to go to www.annualcreditreport.com as I explained here - http://fcralawyer.blogspot.com/2009/05/truly-free-credit-report.html. For the rest of the article about improving your credit score (even the parts I don't agree with), click here - http://www.firmenpresse.de/pressrelease2056.html.

No comments:

Post a Comment