How You Can Raise Your Credit Score
Contrary to what the credit bureaus would like you to believe, credit repair does work and can work for 100% of people in most circumstances. This is, of course, provided you are getting the best advice and have an experienced professional working on your case.
Any one with a credit score below 720 can benefit long-term from the advice and information provided through credit repair; however, there are times when your own limitations make adhering to this advice impossible. The two limiting factors are: (1) your financial situation and (2) the time frame within you need to reach your results. It is possible to remove anything from a credit report, even accurate items, if the creditor does not adhere to the law the outlines what needs to be done and by when. Just because you have a certain type of account removed at one time does not mean other, similar items are going to be able to be removed, even with the same circumstances. A hit-or-miss aspect exists in credit repair, because credit repair relies not only on the strategies of the person attempting to repair the credit, but also on the effectiveness or ineffectiveness of the creditors and credit bureaus in adhering to the laws. Sometimes you want the credit bureaus and credit bureaus to follow the law, sometimes you don’t-it all depends on your particular situation.
The reason credit repair has received such a bad name is due to the abundance of scam artists who flock to the easy money made available by people desperate for this type of service. This unfortunate reality leads the credit bureaus and the FTC to make blanket, untrue statements such as, "Credit repair does not work ever and there is nothing a credit repair company can do for you that you can't do for yourself." Given that more than 90% of credit repair companies are scam artists, promising the world and then disappearing when you pay, the credit bureaus and the FTC are forced to make such bold statements. It would be impossible for them to explain the truth to consumers without causing them to make a bad choice that would result in the getting scammed. As a result, the credit bureaus and the FTC must adhere to the "credit repair does not work" position.
Late Payments TipsYour payment history counts for 35% of your credit score. Therefore, maintaining a good payment history is very important. With a little effort and knowhow, you can be well on your way to establishing that good payment history. Here are a few strategies for you to keep in mind when thinking about your payment history:
Don’t be late on payments, ever.
- Use technology to your advantage. Set up automatic notices on your PDA, calendar or download an app for your iPhone.
- Set up an automatic deduction for your fixed payments, like your mortgage, car loan, student loans, cable or any other payment that doesn’t vary from month to month.
- Work to reschedule your payments so the bills come due at the same time, preferably when your bank account is the most flush, or right after you get paid. You are less likely to forget to pay one bill if you sit down and pay them all at once every month.
- Make payments as soon as your bill statement is available, usually 30 days before it is due, and treat that 30 day pre-payment as your deadline. This will give you a false window, basically creating a bill cushion. If you miss an “early” payment because you are out of town, you are still nearly a month ahead of the actual bill due date.
Avoid missing payments or not paying bills in full.
- Set up a separate checking account and work with your HR department or bank to direct deposit a portion of your paycheck, equal to the amount of your fixed payments, so the money is always there. Use your other checking account to pay variable bills, like power, groceries and any bills you don’t pay every month, like car repairs.
- If you don’t have enough cash on hand to cover all of your bills in a given month, pay your largest bills, like your mortgage, first. Those large accounts factor into your credit statement more than a $35 phone bill.
Manage your records
- If you have made one or two late payments over the course of a few years, call that biller and ask them to remove the late payment from your record as a courtesy for your loyalty to their company. Point out your long-term relationship with their company and your history of making the majority of your payments on-time. If your late payment is truly the exception to the rule, ask them to treat it as such. (If one representative turns you down, call back and try again with a new representative.)
- Check your credit report for accounts marked “Past Due.” These are the accounts dragging down your credit score and doing the most damage on your report. PAY THESE ACCOUNTS FIRST when embarking on any credit repair programs.
- If you have collection accounts, pay the largest and most recent accounts off first. After an account has been in collection for 4 years, you can no longer be sued for that money, so put those accounts at the bottom of your repayment priority list.
With these strategies in mind, you can get into the habit of making all of your payments in full and on time. Payment history takes time to repair, so the sooner you start, the better.