Do you want to increase your credit score? Thinking of buying a new home, but afraid of being turned down by creditors or paying too much with high interest? If that’s the case, don’t worry. There are more than 35 million Americans with less than stellar credit who want to clean up their credit reports. Leading credit counselors support the “win the race slow and steady” strategy. Time, dedication, financial discipline, and careful budget planning will certainly raise your score in the long run. However, there are much easier and faster ways to increase your credit score. The only requirement – knowledge about the inner workings of the system and the various loopholes in it. Here are 3 simple steps to help you understand how fast credit repair works.
1 Define point A and point B.
The first is the first. It’s vital to know where you are on the credit scale (point A) and where you should be (point B). For most creditors, a triple-digit FICO score is the best predictor of your future bill-paying performance. However, a credit score of 680 may qualify you for a favorable home loan with one creditor and may be dismissed as unsatisfactory by another. Different lenders have different credit score expectations, so it’s important to know which score will “open the doors” for you.
2 possible routes between A and B.
Now that you know your score and the score you need to get, you can come up with different credit repair strategies. Taking care of late payments, collection accounts, and tax liens will certainly increase your score. Maxed out credit cards can have a detrimental effect on your credit. That’s why reducing your credit balance to the healthy 30% percent will increase your FICO. You can also try extending your credit history by leveraging someone else’s credit (ie, having someone with a longer credit history than yours list you as a co-user on their credit cards). The problem with all of these strategies is that most of us don’t have the extra money to pay off all debts in full or find a trusted person to give us a vote of confidence and allow us to take advantage of their credit. And this is where little-known credit secrets come into play.
3 Shortcuts to the desired destination.
If you don’t have the cash to pay off all your debts, you should focus on the delinquent account that has the most damaging effect on your score. The three-digit FICO number is divided into 5 factors. Of all those factors, payment history accounts for more than 35% of your score. That’s why taking care of late payments should result in an immediate boost to your score. The next thing you can do is get rid of your collection accounts. Simply paying for the collection will not bring the desired results. It will update the status of the collection to “recent”. Negative debt (although paid off) will now have a bigger impact on your credit score.
Instead, you should try to negotiate with the debt collectors and promise to pay ONLY if they remove the item from your credit report. A removed negative item is much more beneficial than a paid negative item. You have more leverage with collection agencies than you really think. Exercising this leverage will increase your score in no time. Another interesting strategy is to dispute outdated and incorrect information in your account. It is free and credit bureaus are required by law to carry out a timely investigation. If you’re right or if the credit bureau can’t verify the information, then they should remove the item from your report.
There are easier and faster ways to clean credit reports. The only requirement is knowledge about the inner workings of the credit system and the various loopholes in it. Once you start thinking outside the credit box, you’ll be surprised how easy credit repair actually is.