How To Raise Your Credit Score 100 Points In 45 Days

COLLECTION ACCOUNTSDid you know that paying a collection account can actually reduce your score?

Here’s why: credit scoring software reviews credit reports for each accounts’ date of last activity to determine the impact it will have on the overall credit score.
When payment is made on a collection account, collection agencies update credit bureaus to reflect the account status as “Paid Collection.” When this happens, the date of last activity becomes more recent. Since the guideline for credit scoring software is the date of the last activity, recent payment on a collection account damages your credit score more severely. This method of credit scoring may seem unfair, but it is something that must be worked around when trying to maximize your score.

How is it possible to pay a collection and maximize your score? The best way to handle this credit scoring dilemma is to contact the collection agency and explain that you are willing to pay off the collection account under the condition that all reporting is withdrawn from the credit bureaus. Request a letter from the collector that explicitly states their agreement to delete the account upon receipt/clearance of your payment. Although not all collection agencies will delete reporting, removing all references to a collection account completely will increase your score and is certainly worth the involved effort.

PAST DUE ACCOUNTSWithin the delinquent accounts on your credit report, there is a column called “Past Due.” Credit score software penalizes you for keeping accounts past due, so “Past Dues” destroy a credit score. If you see an amount in this column, pay the creditor the past due amount reported.

CHARGE OFFS & LIENS“Charge Offs” and “Liens” do not affect your credit score when older than 24 months. Therefore, paying an older charge off or lien will neither help nor damage your credit score. Paying the past due balance, in this case, is very important. In fact, if you have both charge off and collection accounts, but limited funds available, pay the past due balances first, then pay the collection agencies that agree to remove all references to credit bureaus second.

LATE PAYMENTSContact all creditors that report late payments on your credit and request a good faith adjustment that removes the late payments reported on your account.

Be persistent. If they refuse to remove the late payments at first, remind them that you have been a good customer and would deeply appreciate their help. Since most creditors receive calls within a call center, if the representative refuses to make a courtesy adjustment on your account, call back and try again with someone else. Persistence and politeness will pay off in this scenario. If you are frustrated, rude and unclear with your request, you are making it very difficult for them to help you.

CHECK CREDIT LIMITSEVENLY DISTRIBUTE THE BALANCESMake sure creditors report your credit limits to bureaus. When no limit is reported, credit scoring software scores the account as though your current balance is “maxed out.”

For example, if you know that you have a $10,000 limit on your credit card, make sure that the limit appears on the credit report. Otherwise, your score will be damaged as severely as if you were carrying a balance of the entire available credit.

Credit scoring software likes to see you carry credit card balances as close to zero as possible.

If it is difficult for you to pay down your balances, read the following guidelines to maximize your score as much as possible under the circumstances.

• There are difference degrees that scoring software can impact your score when carrying credit card balances.
• Balances over 70% of your total credit limit on any card damages your score the most. The next level is 50% of your balance and then 30% of your balance.
• In order to maximize your score without having to pay down your balances, evenly distribute your credit card balances amount all of your credit cards, rather than carry a large balance on one credit card. For example, if you are carrying a $9,000 balance on a credit card with a $10,000 limit and you have two other credit cards with a $3,000 and $5,000 limit, transfer your balances so that you have a $1,500 balance on the $3,000 limit card and a $2,500 balance on the $5,000 limit card and a $5,000 balance on the $10,000 limit card. Evenly distributing your balances will maximize your score.

CREDIT CARDSDO NOT CLOSE ACCOUNTSClosing a credit card can hurt your credit score, since doing so affects your debt to available credit ratio. For example, if you owe a total credit card debt of $10,000 and your total credit available is $20,000, you are using 50% of your total credit. If you close a credit card with a $5,000 credit limit, you will reduce your credit available to $15,000 and change your ratio to using 66% of your credit.

There are caveats to this rule. If the account was opened within the past two years or if you have over six credit cards. The magic number of credit card accounts to have in order to maximize your score is between 3 and 5 (although having more will not significantly damage your score.) For example, if a card was opened within the past two years and you have over six credit cards, you may close that account. If you have more than six department store cards, close the newest accounts. Otherwise, do not close any at all.

KEEP OLD CREDIT CARDS ACTIVEFifteen percent of your credit score is determined by the age of the credit file. Fair Isaac’s credit scoring software assumes people who have had credit for a longer time and are less risk of defaulting on payments.

Therefore, even if your old credit cards have horrible interest rates, closing those cards will decrease the average length of time you have had credit. Use the old cards at lease once every six months to avoid the account rating to change to “Inactive.” Keeping the card active is as simple as pumping gas or purchasing groceries every few months, then paying the balance down.

An inactive account is ignored by Fair Isaac’s credit scoring software. Therefore, you will not get the benefit of the positive payment history and low balance that card may have.

The one thing all credit reports with scores over 800 have in common is a credit card that is 20 years old or older. Hold onto old credit cards!

REPAIRING YOUR CREDITDid you know over 80% of all credit reports have incorrect information on them? It is important to review your credit report on a regular basis to check it for inaccuracies. The creditors are required by law to report accurate information. When we find discrepancies on your report we report them to the three credit bureaus. The credit bureaus then contact the creditors to have them verify the information they are reporting. If the creditor does not respond to the inquiry in a reasonable time, the credit bureau will remove the item we are disputing. Many times the creditor will respond and tell the credit bureaus the information they are reporting is accurate and they will refuse to remove the item from your report. In these cases only perseverance and a proven credit restoration program will be successful challenging these items and successfully removing them from your report. Credit Strategies has a proven credit restoration program.

Repairing credit can be a slow and time consuming process. Full knowledge of your credit profile and how it represents you to creditors and credit bureaus is pivotal to the credit restoration success.

Credit bureaus always advise individuals that they have a right to dispute their own credit files. However, when the rights of the credit bureaus slow you down, Credit Strategies is here for you. Call us for a complimentary credit consultation.

CREDIT STRATEGIESTHE SIMPLE SOLUTIONAt Credit Strategies we are trained professionals in credit restoration and education. We are the only Certified Credit Restoration Experts in the State of Arizona. We have over 25 years of experience reading and analyzing credit reports.

The credit reporting models are always changing. You want to have a trained professional working for you that keeps up with the new credit reporting models as well as any new laws. We use the Fair Credit Reporting Act to take full advantage of the protection it provides our clients.

At Credit Strategies we use a credit restoration program that has been perfected over many years of working with thousands of credit restoration clients. We are consistently looking for new ways to help our clients obtain their highest possible credit scores.

We also offer credit education classes to groups, businesses and schools. It is a lot easier to manage your credit profile when you have credit goals. We can help you set short term, and long term goals. We will coach you on what to do, what questions to ask, and what type of credit mix you should have in your credit portfolio in order for you to have the highest possible credit score.

If you are currently experiencing credit problems, if you have had credit issues in the past or if you want to be educated to ensure you have the highest possible credit score, call Credit Strategies today at 480-502-5554 for a complimentary credit evaluation. You can rest assured you will receive the highest degree of professional service possible.

Need more information? Email me or visit Credit Strategies online.