Monday, February 15, 2016

Stay on Top of Credit Scores and Improve Them

   You've saved up enough money for a down payment on a new house but you have no idea what your credit score is or whether you have any dings on your credit report. Whenever you start saving up for a new house you should start repairing your credit at the same time. It may take you that long to get your credit in order, so why not kill two birds with one stone. Just so you know repairing your credit is a lot like losing weight. It takes time and there is no quick fix. Beware
of anyone that offers you a sure fire way to fix your credit because most likely it will turn out to be a sure fire way to lose some money and backfire especially if they promise you a fast solution. The most sensible advice for repairing your credit is to manage it responsibly over time. Your credit history needs to be in the forefront in repairing your credit as this will affect your credit score as much or more than anything else. These credit repair tips will help to improve your credit score. 
   A FICO score is a credit score developed by FICO, a company that specializes in what’s known as “predictive analytics". This analysis means that they take information and analyze it to predict what’s likely to happen in a given situation. In the case of credit scores, FICO takes credit information and uses it to create scores that help lenders predict behavior. This behavior will show how likely someone is to pay their bills on time (or not), or whether they are able to handle a larger credit line. Scores developed by FICO can also be used to forecast the accounts that are most likely to end up included in a bankruptcy, or which ones are likely to be most profitable.  
   Check your FICO score periodically, if you haven't already requested your free copy of your credit report do it now and check it for errors. The credit report will have all the data that is used to calculate your credit score and it may contain blatant errors. Any errors on your credit report should be disputed with the credit reporting agencies and this must be done in writing most of the time and will take some time although the blatant errors can be done online. 
   The optimum way to get those FICO scores up is to set up payment reminders because making your credit payments on time is one of the biggest factors that affect your credit scores. There are
tons of payment reminder apps all over the internet. Look at the recommendations and try a few until you settle with the one that is best suited for your needs. Some banks offer payment reminders along with their  online payment portals that will send you text messages  or email with reminders about impending payment deadlines. There are automatic payment programs through your bank or credit card company or even some loan providers.      The payments would be automatically debited from your bank account. On revolving credit this type of payment does not account for payments that will let you manage your account. 
   Another good way to get your FICO scores up is to reduce the amount of debt that you owe. Reducing the amount you owe will Be a far more satisfying than improving your credit score but it is far more difficult to accomplish. The best way to accomplish this is to stop using your credit cards. Utilize the credit report to determine your debt and the interest rate. Make sure your new payment plan pays more on the debt payments that have higher interest rates and pay as much over the minimum that your budget will permit. The other lower interest cards you want to sustain with minimum payments but make sure they are all paid on time. 
   Late or delinquent payments even if only a few days late and collections accounts  can  have a very negative impact on your FICO scores. To increase your scores the longer you keep paying on time on your past due accounts, the sooner you can increase your FICO scores. The older the delinquencies the less impact on your credit because the most recent history has more impact. This credit behavior will outweigh any derogatories because it will show that you're managing your credit well. When paying off a collection account, it will not removed from your credit report and could stay on your report for seven years. Make sure that when you do satisfy a collection account try and get them to send a letter to the credit reporting agency stating that the debt was fully satisfied. 
   If in the long run you're having trouble making ends meet, you may want to consult a legitimate credit counselor. This should not  hurt your scores and if you ask for help paying on time will eventually bring up your FICO scores. Here are some other suggestions:
  • Keep balances low on credit cards and other "revolving credit". … 
  • Pay off debt rather than moving it around. ... 
  • Don't close unused credit cards as a short-term strategy just to increase your available credit. 
  • Pay your bills on time. 
  • High outstanding debt can affect a credit score. 
  • Pay off debt rather than moving it around. 
  • Don't close unused credit cards as a short-term strategy to raise your scores. 
  • Re-establish your credit history if you have had problems. 
  • Opening new accounts responsibly and paying them off on time will raise your credit score in the long term. 
  • Note that it's OK to request and check your own credit report. 
  • Apply for and open new credit accounts only as needed. 
  • Have credit cards – but manage them responsibly.
  • Dispute errors. Mistakes happen. You can dispute errors online through Equifax, Esparian, and TransUnion