Help to Fix your Credit NOW!!!

If you read one of my last posts "All About Credit Scores" and your credit score wasn't quite where you wanted it- Don't Stress! There are ways to get the credit score you have always wanted. Here are some things you can do to get your credit on track:

1. Know Your Credit Report: This isn't one of those if I don't look, it will go away deals! Knowing your credit report (as scary as that may seem) is the first step to getting it where you need it to be. By getting a copy of your report you will be able to identify what actually is wrong with your credit and it may not be as bad as you think! I would suggest getting a report from all three credit reporting agencies; Experian, Equifax, and TransUnion. If you go to http://annualcreditreport.com the federal government has made it possible to obtain a report from all three of these agencies once a year for free. Please note: there is a small fee if you want to get your credit score (The credit report only outlines your credit history).

2. Identify your problem area(s): Your credit report will show any collections, judgments, liens, and past due accounts. Current accounts will be marked with a C, 30 days delinquent with a 30, 60 days delinquent with a 60, and so forth. For Example:

Macy's 1/99                                        30CCC6030CCCC90   (DON'T BE INTIMIDATED, read below)

This shows that your Macy's account that you opened January of 1999 is currently passed due 30 days (Left is most recent credit history). It shows you have made the payment on time 7 times, it also has been 30 days delinquent twice (including this time), 60 days delinquent once and 90 days delinquent once.

3. Get Current: I know times are tough for a lot of people, but one of the worst things for your credit is currently being passed due on your accounts. Try to get current if possible and go for the bigger things first- 1. Mortgage(s), 2.Auto loan(s), 3. Personal Loans 4. Credit Cards. Bringing your accounts up to date is like putting a Band-Aid on your credit score- the wound will still be there but it will start the healing process.

4. Check Your Revolving Debt Percentage: Simply put, Revolving Debt is credit card debt. To check your revolving debt percentage add up all of your credit card limits (with or without a balance) now add up all of your balances and subtract this number (it should be under 50%). If it is more than 50%, this will bring your credit score down as it looks like you "rely too heavily on your credit".


Credit Card                                         Limit                                   Balance
Sears                                                      2000                                     1000
Walmart                                                    500                                          0
Chase                                                      2500                                      2500
                                                          
Total                                                     5000                                      3500
Revolving Debt Percentage =               70%  difference is 1500


5. Pay Down Your Credit Cards: Strive for the under 50%.  If at all possible I would work toward paying them off ccompletely! I will do another blog to show you the "evils" of revolving credit but for now just know it's not good.  Please note: I am not against credit cards just the revolving interest rates. There are many advantages to having a good "rewards card". We can discuss in detail another day...

6. Stop Applying For Credit: Did you know that every time you apply for credit it drops your score a few points? Some lenders will deny this- but I have seen it first hand. The 15% that you are saving to apply for that credit card at your local store will ultimately cost you at least that much in points!

7. Don't Close You Credit Cards: Yes, you just read that correctly. This does not mean keep using them, but by keeping them open, this will help you keep that revolving percentage rate down. 

8. Is it yours?: Errors sometimes happen on credit reports! Check for fraudulent accounts or errors and dispute them with your credit reporting company. To dispute any items you must write to your credit reporting agency include the nature of your dispute and copies of any information that may be relevant. Send your letter via certified mail and be sure to "return receipt requested". Your agency has 30 days to investigate and forward any information you provided to the company that provided the information. If they find that they reported in error they will remove it from your credit.

9. Be Patient!: This is a time consuming and some times frustrating process. It will all be worth it in the end!

I hope this information helps you get back on track. If you have any questions feel free to message me via email or facebook and I will try my best to help!

Good Luck! :)