Tricks Of The Trade
By Jim Kemish
Are you interested in building and maintaining great credit? Credit repair and restoration expert Jim Kemish discusses a few powerful credit repair strategies that can produce dramatic results in a short period of time.
Great Credit is Within Reach
The benefits of great credit are significant. The effort that you put into improving your credit score will be well rewarded. Here are the some powerful credit repair strategies that can produce dramatic results in a short period of time.
Check Your High Credit Limits
The relationship between your current balance and the available credit limit on each of your revolving accounts has a major impact on your credit score. Consumers often overlook this important issue. Each and every revolving account on your report should be examined. If the high credit limit is understated send a dispute letter to each of the three credit bureaus asking them to update the information. Donít bother calling the credit card companies directly. The credit bureaus are responsible. Let them do the work. The results will be better and faster.
Increase Your High Credit Limits
There is one additional course of action that you should consider that can also reduce the ratio of your current balance to your high credit limit. Call each and every credit card company and ask them to increase your available limit. They may or may not agree, but you might be surprised. By the way, please keep in mind that you are doing this to improve your credit. Having a higher credit limit does not mean that you should use it.
Check the Age of Your Accounts
New accounts count against your credit score. Conversely, the credit bureaus will reward you for the accounts that you have maintained over time. When reviewing your three credit reports be sure to look carefully at the initial reporting date for each revolving and installment account. If the age of the account is incorrect on your credit reports send dispute letters to the bureaus. Here also donít bother contacting the creditor directly. You will find that this is well worth the time involved.
Resurrect an Old Account
It is not unusual to discover an account on your credit report that you forgot about years ago. If you donít have much credit please donít cancel the account. If you no longer have the card in your possession I suggest that you call the company and obtain a replacement card. When you get it you should make a small purchase. The exact algorithm used in the FICO score is a secret, but based on our observations it is best to have some occasional activity on a credit card. Old accounts are good accounts!
If you have limited credit and want to improve your credit score it is essential that you get a few credit cards. Secured credit cards are an excellent option that is available to everyone regardless of credit history. In the credit repair business we recommend this course of action. It is true that opening a new account will have an adverse impact on your score, but it is worse to have a lack of credit. In this situation secured cards will have an important and positive impact. Typically there are some fees involved with these cards as well as relatively high interest rates.
Authorized User Cards
In addition to getting a couple of secured credit cards you should also ask a trusted friend or relative if they will make you an authorized card member on one of their accounts. Currently the FICO scoring model seems to give new authorized card members the full score benefit of the principle card members credit history. Please be aware that authorized user status is not the same as additional card member status. Authorized user status does not require that you qualify, and either your friend or you can cancel your status at any time. I suspect that both you and the principle card member will favor the authorized card member status.
Post Bankruptcy Cleanup
If you have had a bankruptcy you should take action to clean up your credit with all three bureaus immediately upon receiving your discharge. If you donít feel up to the task of dealing with the paperwork I suggest that you hire a reputable credit repair company. A reputable credit repair company will be inexpensive and be able to do this for you very quickly. The credit bureaus are required to remove all of the derogatory information from each account that was discharged. If you donít take action to clean up your credit report it will not happen by itself. A comprehensive post bankruptcy clean up can have a dramatic impact on your credit scores within as little a sixty days after your discharge.
About the Author: Jim Kemish is the president and founder of Power Mortgage, a Florida mortgage company based in Delray Beach, Florida. Jim is also the President of Sky Blue Credit, a national credit repair business.