15-minute fixes to raise a credit score

15-minute fixes to raise a credit score

Setting up automatic bill payments can boost your number by as much as 50 points.

Improving your credit score can feel like a gargantuan task. But by spending just 15 minutes, you can give your credit score anywhere from a small bump to a major boost. Here are some tips from credit experts on quick — and sometimes easy — ways to raise your score.

1. Set up automatic bill payment or alerts.

“The one thing you need to do is pay bills on time — that has the biggest impact on your score,” says Carrie Coghill, director of consumer education for FreeScore.com. One way to do that is to set up automatic bill payment through your bank or credit union, at least for the typical minimum amounts of your bills, says Lita Epstein, author of “The Complete Idiot’s Guide to Improving Your Credit Score.” Or, if you’re not comfortable with automatic bill payment, Coghill recommends setting up regular email or text message alerts to remind you of bill due dates. On-time payments over a period of about six months can increase your score by as much as 50 points, says Epstein. “It shows you are getting responsible about your bills.”

2. Pay down revolving debt.

If your credit card debt is more than 35 percent of your credit limit, it’s probably dragging your score down, but paying balances down can provide a quick boost. Experts recommend setting up regular automatic payments to make a dent in your debt or making one big extra payment if you can sell something on Craigslist or eBay or if you get a windfall. “People sometimes get a sizeable tax refund. I recommend using that to pay off debt,” says Doug Borkowski, director of the nonprofit Iowa State University Financial Counseling Clinic. A good rule to follow is this: For every $1,000 of available credit, try to use less than $350, says Clifton O’Neal, a spokesman for TransUnion. “Say you have three cards, each with a $1,000 limit,” O’Neal says. “One has a $500 balance, one has a $350 balance and one has a $250 balance. Pay on all of them, but pay more on the first one to bring it down under 35 percent.”

3. Pay your credit card bill early.

If you use your card for everything from groceries to utilities to a pack of gum to get rewards — but pay in full each month — pay early. Because if you charge, say, $2,000 each month, but pay your bill after you get your statement, it looks as though you’re carrying a large balance when you’re not, Epstein says. “Check when the statement closing date is,” Epstein says. “Making the payment before the statement closing date — just five or six days early — can make a big difference over time. It will be reported to the credit bureaus as a $0 balance and will look like you’re holding less credit.”

4. Ask your credit card company to raise your limit.

If you carry a credit card balance but have been making payments on time and make enough money to support a higher credit limit, a quick phone call to your credit card company could raise your score. A higher credit limit will lower your credit utilization ratio (the amount of available credit you’re using), experts say. However, experts also say it’s important to be honest about whether that step would tempt you to rack up more debt. “It’s about knowing yourself, asking, ‘Am I going to be responsible using that credit card?'” Borkowski says. “Because what if your limit is $4,000 and it gets raised to $8,000 and all you end up with is more credit card debt? But, for those who can handle it, yes, call and try to get your limit raised so you’re at a one-third or less [credit utilization ratio].”

5. Go online to dispute an item on your credit report.

Some experts advise consumers to dispute a possible credit report error by registered mail, and to include evidence. But, let’s face it, many never get around to making copies, hunting down a stamp and heading to the post office. All three major credit bureaus offer the option of filing a dispute online — and it can be faster and easier, experts say. “The first thing to do is pull a copy of your credit report from all three bureaus. You can do it free once a year at AnnualCreditReport.com,” says O’Neal. “Look at each one and see if there’s anything you don’t recognize. If you have any questions about information on your reports, you can file a dispute online. You can track it online, too, so it’s a lot quicker.”

6. Just say no to too many inquiries.

When you’re buying those cool new sunglasses and the cashier asks if you’d like to get a 10 percent discount by signing up for a store credit card, just say no. “Whenever you take new credit, you get a ding on your credit score, so don’t apply for new credit cards all the time,” Epstein says. In fact, she recommends applying for new credit, at most, twice a year.

7. Get a late payment removed from your credit report.

In the “it-can’t-hurt-to-ask” category, it sometimes pays to call a creditor and ask to have a late payment removed from your credit report. “I always say, ‘just ask,'” says Borkowski, who recommends asking for the hardship department whenever you call a credit card company to make such a request. “A lot of times, general customer service might say they can’t help you, but the hardship department — or its equivalent — might,” Borkowski says. “They make a lot of money from the person who misses a payment every now and then but carries a big balance. They like to keep those customers.”

It is often repeated that, when it comes to credit scores, there are no quick fixes. However, if you follow these tips, you could see a big improvement in your credit score — with just a small investment of time.

Six red flags for your credit report

Six red flags for your credit report

You know bankruptcy and missed payments, but they can be just as bad.

You pay your bills on time and never miss a payment. If you’re still having problems with credit, something on your credit report could scare lenders.

Everyone knows the gremlins that haunt the major credit reports: items such as bankruptcies, foreclosures and payments, late or even missed. Less dramatic items can also cause some anxiety among lenders inconsistent.

When you apply for a loan or a card account, lenders review your credit score and pull your credit report. Or they can take this report and pump through one of their own rating systems.

If they do not like what they see, you may be rejected. Or you can get approved with less favorable conditions. And it’s not just new applicants who have run the gauntlet. Credit card issuers to periodically review the records of existing customers, too.

Even more confusing is that different lenders zero elements of the credit report. So it’s quite possible that even for the same loan, no two lenders will see your credit history, in exactly the same light.

Think there might be something hateful about hiding your credit report? Here are six items that could scare lenders.

1. Multiplying Lines of Credit

Opening a new map is normal. Opening three in a short period of time could signal something bad happens in your financial life.

When it comes to card issuers of credit, “the window auditing has shrunk,” said Norm Magnuson, vice president of public affairs for the Consumer Data Industry Association, the trade association of companies credit. “It used to be months and months. Now, you will find firms that monthly monitoring of account or every two months.”

And the only thing that these issuers do not want to see is that you ask all in town to lend you money.

“It would raise some questions,” he said. “This could be an indicator of something going on. I do not think it’s in the best interest of all consumers to go and be a collector of credit lines.”

2. A short-sale housing

“We told people short sales will not hurt their credit,” says Maxine Sweet, vice president of public education for Experian credit bureau. “But there is no such thing as a” short sale “in terms of how the sale is reported to us.”

“The way the account is closed is that it’s settled for a lesser amount than what you agreed to pay originally,” she said. “Status is” settled “. And it is just as negative as a foreclosure. ”

A tip: negotiating for the lender does not report the difference between your mortgage and what you paid as a “balance due” on your credit report, says John Ulzheimer, formerly of FICO, now president of consumer education for SmartCredit.com. Your credit score will take a heavy blow, but this action will not soften the blow, he said.

Sweet’s advice is not to dismiss the notion of a short sale, just go on with your eyes open.

“This may be the right decision to leave the house,” she said. It can be “better than a foreclosure in the economy, moving from the house and move on with your life. Do not expect to walk away with no impact on your credit history. ”

3. Someone Else’s Debt

Here’s something you might not know: When you co-sign on the dotted line to help someone else get a loan or card, the entire debt is on your credit report.

While the fact that you co-signed is neither good nor bad, it means – to the extent that any potential lenders are concerned – you of the debt yourself. And will be included in your existing debt burden when you apply for a mortgage, credit card or any other form of credit, said Ulzheimer.

And if the person you co-signed stopped paying, paying late or missing payments, that bad behavior is likely to go on your credit report.

So when someone tells you that co-signature is painless, because you never have to part with a penny, you can tell them that this is not true. Co-signing means accepting not only to repay the obligation, if necessary, but also to allow the debt – and all non-payment – as against you the next time you apply for credit you same.

Co-signing for a friend or family member “plays well with the Thanksgiving table, but it does not play well in the underwriting office,” said Ulzheimer.

4. Minimum Payments

If creditors make money when you carry a balance, the lenders who view your credit report does not like to see you pay just the minimum.

“It suggests that you are experiencing financial stress,” says Nessa Feddes, vice president and senior advisor for the American Bankers Association. “You can be delinquent,” she said.

Pay the minimums from time to time does not necessarily signal a problem, she said. For example, minimum pay in January, after holiday spending. Minimum one month or pay you expect your annual premium to reach.

But always pay the minimum after months months signals that you can not pay the full balance, and your current and future lenders will see that as a red giant “stop” sign when it comes to grant additional credit.

5. A Lot of Inquiries

This is similar to hiring a large number of new loans. When tightened lending standards, many borrowers, subprime borrowers in particular, had trouble getting credit, said Sweet. This meant they had to be applied several times to try to get what they wanted.

And with the VantageScore at least, that “really influenced the impact of investigations – they are more important than they used to be,” she said.

With the FICO score, the impact of investigations has remained about the same, according to Ulzheimer. Every time you allow a potential lender to pull your credit report, your score can take a small hit. The exact impact varies with the consumer, the score and the number of inquiries.

And if you apply for a mortgage, auto or student, you can minimize the damage by all applications within two weeks. When you do this, the beam score of all similar investigations and treats them as such. Unfortunately, there is no grace period for applications like credit card.

6. Cash Advances

“Cash advances, in many cases, provide the despair,” says Ulzheimer. “Either you have lost your job or are underemployed. Nobody comes out cash advances against a credit card because they want the money sitting in a bank somewhere.”

Because the interest rate is usually higher than the cost of credit card “, you are usually borrow from Peter to pay Paul,” he said.

How it hurts: first, the cash advance is immediately added to the balance of your debt, which lowers your available credit and can lower your credit score, says Ulzheimer. And all potential lenders will see your score.

Second, card issuers more regularly re-evaluate the behavior of their customers. To do this, they often get the credit report, the FICO score and history of the customer’s account and put these three ingredients through their own rating systems, said Ulzheimer. Many scoring models penalize for cash advances, which are often considered risky, he said. From your account history is only available to the issuer, only your behavior score with this card is likely to be affected, he said.

However, if the issuer slices of your line of credit or cancel your account, which could affect your credit score. And that could affect your relationship with other lenders.

How to fight errors in your credit report

How to fight errors in your credit report

A well-designed dispute letter can help prevent rejection, the next time you apply for credit.

You’ve probably heard of “sticker shock”, but what about the shock of rejection of credit? This can happen when you apply for a new line of credit – a credit card airline miles new, or maybe even a mortgage – only to find yourself rejected for reasons you can not understand. Worse, when you get a good look at your credit report, you will find that you have entered do not even recognize, let alone agree with.

How do you fix something that was listed on your permanent record by one (or all) of these credit bureaus huge? Does this mean your credit is forever doomed? For starters, there is no need to panic, or anger. Unfortunately the errors on credit reports are not so rare. And even if it’s a pain in the neck, there are steps you can take to rectify the situation. This is the most important to be persistent, and document the process.

Know What You’re Up Against

Get a copy of your credit report from all three major agencies. You can do so online or by phone each of the major services: TransUnion, Equifax and Experian. Each credit report is divided into several sections, including a section covering personal information, requests for credit reports, accounts in good standing, elements of credit and potentially negative elements.

Analyze each of the three reports thoroughly and determine the accuracy of all information they contain. Much of what is on the report should be known to you as a loan you out, what you are looking for is errors. Make a list of all the elements that you feel doubtful or negative errors. (Also note the differences between the three credit reports). This will give you a start on solving problems and potentially improve your credit rating.

Documents and Disputes

If you find errors on your actual report, there are several steps that must be taken to resolve them. Under the Fair Credit Reporting Act (FCRA), the credit reporting agencies are responsible to correct inaccuracies and incomplete information on credit reports. This allows you the freedom (and responsibility) to contact the reporting agencies, which publish documents, to correct any inaccuracies you find.
Read more “How to fight errors in your credit report”

What you should expect from credit report repair company

What you should expect from credit report repair company

When signing up with a credit report repair company, ask the consultant what is included in the service. There are 3 parts to achieving a great credit score:

1.Repair
2.Trade lines
3.Education

A great credit report repair company will not only help with the credit report repair, but also guide you on what type of trade lines to obtain and educate you on how to use and pay those trade lines to maximize your credit score. Education on how to use credit cards for utility purpose only is extremely important!

Discuss your future goals

A great credit report repair company should ask initially what your future goals are. This way you and the credit report repair consultant have an idea of how many points you are away from your goal.

Knowing mortgage and banking guidelines prior to credit report repair

Make sure your credit report repair consultant is familiar with mortgage and banking guidelines. Somebody that is looking to purchase a home in the future, is going to be much different than somebody that is applying for a business loan.

Is your credit report repair company working for you?

Make sure the credit report repair company you are using has your best interest in mind. The reason most people seek a credit report repair company is to obtain a higher credit score in order to save money on interest rates.

Stay away from credit cards with high fees

Do not apply for unsecured credit cards with high fees. A short term fix can create a long term problem. If you are referred to a credit report repair company from a mortgage broker, real estate agent or a builder, ask the credit report repair company if they are going to continue working on your credit after you purchase the home. Your credit score should be the primary focus. You need somebody that is focused on helping you obtain the highest credit score you can achieve.

Does your credit report repair company have an office location?

Ask your credit report repair consultant if you can meet them at their office location. Many credit report repair companies operate out of their home. You want to be able to drop by the office and speak with somebody if you have any questions and concerns. It is important for you to get to know your credit report repair consultant. There is no better way to establish a relationship than a face to face meeting.

How to read your credit report

How to read your credit report

The x-ray of your credit health can be dense, so just look for these six items.

You have one shot of your credit reports. And now? As you’ve probably heard about now, you are entitled to free copies of your credit reports. Federal law gives you the right to request your credit reports from three, one from each of the three major credit reporting agencies each year.

You can get them at a time or throughout the year. Personal finance gurus often recommend taking a report every four months that you regularly monitor your records. Anyway, checking your credit reports is a smart move considering that the information in your credit report determines your credit score.

But once you get the report, what do you do with it? How about giving the treatment of six minutes? Then you definitely want to read the full report in detail, a quick check on a handful of indicators can give you an instant assessment of how good – or bad – your credit is right now.

Here are six markers that can provide an X-ray of your credit health.

Late payments

Delinquencies are “enormous influence” on the credit score, said Stephen Brobeck, executive director of the Consumer Federation of America. In fact, they represent 35 percent of your FICO score.

If you see the ratings invoices were paid 30, 60, 90 or 120 end, “it is very damaging” to your credit, he said.

The other factor is important here: the timeline. How was the end of the payment, and how long you make this mistake?

Following payment, the more it hurts your credit, says Evan Hendricks, author of “Credit scores and credit reports. How the system actually works, that you can do”

But the more time that has elapsed since you made a late payment, the less it will affect your credit, he said.

Limit high ratios of debt to credit

Credit scores typically look at your debt-ratio limit credit or “use” in two ways: They compare the balance on a revolving account to your credit available from that lender. For example, if you have a credit card with a balance of $ 1,000 and a $ 5,000 credit limit, this ratio would be 20 percent.

Scoring formulas also look at your debt-credit limit ratio is a second way: the calculation of the total of all your debts on the accounts revolving lines of credit against your total of these accounts.

So if you have four credit cards each with a credit line of $ 5,000 ($ 20,000 in credit), and you have a balance of $ 1,000 on two of them and nothing on the other two ($ 2,000 debt), this ratio would be 10 percent.

“In an ideal world, you want to have (ratios) of less than 10 percent,” said Hendricks. “But certainly you want to keep them under 40 percent. There is no magic.”

But if you use a balance of $ 2,000 to $ 3,000 with a card that has a $ 5,000 limit, “which will really hurt your score,” said Brobeck. “And what is worse, running up balances on several cards.”

Collection activity

In most cases, if you have an account that went to collections or have been written off as bad debt, you know about this, said Rhonda Bailey, credit counselor and manager of the review of credit report for Credit Counseling Non-profit Arkansas. But not always.

“There are a few cases, as an old utility bill after you have moved, (where) the collection agency and not find (the consumer) has forgotten about it,” she said. “I see that sometimes.”

If you find an article that is not yours, you can dispute and have removed from your report.

If the item is yours, you have decisions to make, says Bailey. Can you afford?

It’s a good idea to check the law of your state of limitations, which is the period of time creditors have to sue you over a debt. Your state attorney general’s office can give you that time, she said.

Separate this time, the question may remain on your credit report for seven years. Plus it was on your report, unless it affects your score.

Judgments, liens, bankruptcies

Hopefully you know if you have had major financial difficulties that involved judgments, liens or bankruptcies. However, if someone else uses – and looting – your financial identity, a notation on your credit report could be your first clue.

Same if a collector less-than-scrupulous you marked with another debt or taken action against you without proper notification.

When you get this report, the digitization of “public records” section, explains Michelle Doshi, the editor of publications for the Consumers’ Association Credit Union National. “If there are liens or bankruptcies, it is a good way to check. ”

Active accounts you have closed – Or never opened

You close a store card after moving. Or you finally had time to ask your daughter to close the card account you have co-signed for her when she was in college.

The next time you pull your credit report, if enough time has passed, we must show that these accounts are closed, said Doshi.

Looking back on your credit report “is a way to verify that you have closed and their dates are correct,” she said. If this should be a closed account on your credit report open lists, it’s a good time to contact the issuer and find out why.

Information drive

Another thing to watch is the accounts you do not remember opening the first place. The absence of a mix-up, which could be an “indication of identity theft,” says Doshi.

Your credit report will tell you who else has looked at my credit report. Called “investigations” into the credit-speak, they are of two types.

Applications are hard when you actually asked for new funding – has completed an application, signed documents, etc. – and asked a lender to verify your story. When you get a hard inquiry, your credit can take a slight decline. Hard inquires could affect your score for one year, but you will see on your report for two years.

Soft inquiries are what the credit bureaus put on your report when someone looks at your credit, but you did not request new loans. If you pull your own credit report, which is a soft inquiry. You’ll also see if a potential lender pulls your credit for marketing purposes. Applications software do not affect your score.

Applications are disks “such a small part of your credit score,” said Kelly Rogers, Chief Development Officer of the Consumer Credit Counseling Service a non-profit Orange County, California, and assistant professor at the University Chapman. “But that’s a great way to see if someone has used your information.”

Easy ways to boost your credit score

Easy ways to boost your credit score

These measures may make the difference between having a score of 550 and 780.

To improve your credit score seem intimidating? It need not be. Taking a few small steps now can make the difference between a 550 and 780. Follow these tips to see your score improves.

1. Request a copy of your credit report

You are entitled to a free credit report each year in each office of consumer credit nationally – Experian, Equifax and TransUnion – through the Fair Credit Reporting Act.

“It is important to remember that consumers have more than one credit report. As there are three credit reporting agencies, different information on each of their credit reports can differ,” said Clifton M. O’Neal , senior director of corporate communications for TransUnion. Request a free credit report “can help consumers keep an eye on all their financial activities.”

O’Neal advised to check each report for fraudulent activity and to correct any errors. website of each credit bureau provides information on how to correct errors.

2. Take steps to improve your credit score

Credit bureaus and other companies follow the information contained in your credit file, and the tightening of a three digit number called a credit score. Having a low credit score will raise a red flag to lenders and could lead to the rejection of a loan application. Or even if the application is accepted, your interest rate could be much higher. In other words, if you want to buy a house or a car, improve your credit score is an essential first step.

“If you go to apply for credit at any point in the future – if a new credit card, mortgage, line of credit mortgage or a small business loan – your credit score depends very much on little or a lot you’ll have to pay for the credit… if you get it all, “says Russell Wild, certified financial advisor and co-author of” A Year of organized life financially. ”

You can improve your credit score by paying bills on time, keeping your debt to less than 35 percent of your available credit, paying down debt and to dispute errors on your credit report.

3. Read (and understand) the terms and conditions of your credit card contract

Nobody wants to read the fine print, but it contains all important information on payment terms, interest rates, annual fees and penalties. Your credit card agreement – also called “terms and conditions” card or contract – it has, if often takes the eye health and reading comprehension at the college level.

“Most people do not bother to read the terms and conditions, and that’s a mistake,” said David Jones, president of the Association of Independent Consumer Credit Counseling Agencies (AICCCA). “You should not be surprised if your interest rate rises because you missed a payment. That’s all there in black and white.”

Most credit card agreements are difficult to understand, but that could change: Under the 2010 reform of Wall Street and Consumer Protection Act, a new Consumer Financial Protection Board shall have power to impose changes in contracts to make them easier to understand.

4. Read your monthly statements

According to Jones, credit card statements are easier to understand than ever. Credit Card Act of 2009, whose main provisions came into force in February 2010, required a new design and disclosure requirements to make statements more user friendly. Among the requirements, fees for late payments and what the money paid in fees and interest on different types of accounts must be provided. CreditCards.com has created an interactive look at the new credit card statements, using examples from all major card issuers.

If there is something that makes no sense to call your credit card company or a credit counseling agency approved by the AICCCA or the National Foundation for Credit Counseling to ask questions.

5. Repay – or pay – the balance of your credit card

“As soon as the bills come in January and cardholders realize how long it will take them pay for their holiday spending, pay bills credit card becomes a priority,” said Jones.

One of the changes required by the Act was that the MAP card statements should show how long it will take to pay off a balance if you pay only the minimum.

When it comes to paying credit card balances, avoid making new charges focus on the repayment of the card with the interest rate as high and always pay more than the minimum payment.

“Even if you can pay $ 5 over the minimum balance is a good idea because it goes straight to the capital and help reduce your debt, even a little,” said Jones.

6. Use credit cards that match your spending habits

Choose the “right” card at the checkout can save you a bundle, according to Wild.

Consider the terms of payment, he said, “including the interest rate you will pay if you do not pay your debt at the end of the month.”

Cardholders who do not pay their balance at the end of the month should be prepared to sacrifice to get a rewards card that has a lower interest rate.

Wild also suggests being careful with cards stores, especially those promising zero interest. If you have a history of late payments, interest rates can skyrocket which is a costly mistake.

Annual fees can also accumulate. If you pay $ 50 per year on airline miles for multiple cards, but never cashed in a single air mile, these accounts may not be the best solution for your consumption habits.

7. Think twice before canceling cards

Your credit score is determined in part by the variety of accounts you have, and if you ate a lot of your available credit by carrying balances. In other words, the balances on several cards will affect your credit score. Wisely manage these balances and do not rush to close accounts.

“Any major change in your habits, credit cards, including cancellation, will raise a red flag and an impact on your credit score,” Jones said. “If you want to reduce the number of cards you carry to cancel a card and a few months later cancel another rather than cancel them both. ”

Having multiple lines of credit balances and gives you a low rate of credit at low rates of use, which is good for your credit score. Make sure you keep your balances low – overall and on each credit card you have. And use of each card from time to time if the credit card company not to cancel the account.

If you’re struggling with debt and have too much available credit can lead to the temptation to spend, you might be better to cancel credit cards. It is best to let your credit score take a hit to close the accounts of dealing with the consequences of the debt burden too much and not being able to repay.