25 Dec Improving credit score
You don’t wake up one morning and say; I want to see my credit rating or what are the best ways to increase credit score. You have to have a prior commitment or purpose to do that, for example your mortgage broker told you that you cannot qualify for the refinancing your loan or buying the house you were dreaming to buy or they wanted to charge you an extra $400 and more a month. That is when increasing credit score to get mortgage comes to you. You did not wake up in the morning and say to yourself I got to find ways to increase credit rating on my reports unless you wanted to buy a car and they wanted $5000 more for interest rate or they simply refused you …
You wanted a get a job but the pre qualification was not having big debts or collections on your credit or you just could not rent the apartment you want because the manger turned you down for your bad credit.
Now you are the one responsible for making the mess on your credit so, you are the one that needs to fix it. So it takes responsibility and time to repair credit. Most people think you just wave the magic Wang and your credit would be fixed and they use the example of such a company or the person who did it and they expect the same without knowing the exact situation and circumstances and the credit report of that person.
I am here to tell you after dealing with many credit reports and disputes that “fixing credit “is not overnight job for most people. Yes the deletion of the inaccurate items on your credit report can happen around 30 days if you don’t have too many of them ,but that is only 35% of the whole thing.
Because you don’t live in one of those small countries with high corruption which you pay someone who works in the company to delete the negative items, there is no other legal way to delete your negative items.
Only the inaccurate,incomplete, unverifiable and items with errors can be disputed legally so, If you call me and say” MelI have 10 negative items including some collections a judgment and a few late payments and they are mine and accurate” I cannot help You.
As I was saying only 35% of the Fico score is relates to your history which is late payments, bankruptcies, judgments etc…For most part you can do something on your own to increase your Fico score on the remaining 65% which includes “length of credit, new credit, mixture of credit and amount owed.
So, let’s be realistic talk about the other 65% and how we can improve our credit and score in time 3-12 months period. We start with the biggest 30% effect which is amount owed and where you can make a big difference so, stop blaming other people and do something about it.
First you can pay down your debts or distribute the debts in between your accounts to keep the ratio of Credit limit to debt under 30%. You can pay your bad balances to zero (except collection accounts because paying an old collection account will decrease your score, unless that is a condition of your loan office to get the loan you want.) The most important thing you can do here is ask someone with good credit to add you as an additional card holder (most of my clients do not want to do this because of risk or embarrassments etc…) I am here to tell you that your friend does not have to give you the card and also if you want to fix your credit you have to do that. Also getting a secured credit from your bank or credit union will help. Calling your good credit standing accounts and asking to raise your limits especially if they can do it with a soft pull will help.
About 15% of the score is your length of your credit history which you cannot do much about it; one thing you can do is not to add too much new credit which will not help you. (Have fewer inquiries)
About 10% is new credit which goes back to the above, which do not add extra inquiries in your account. Unless you are shopping for a mortgage loan or a car loan which try to do in within 30 days.
There is another 10% which is mixture of credit like car loans. Mortgage and gas cards. But if your credit is very bad they will not give you and it would create an inquiry on your account if turned down or not which is not good specially if turned down.
In summary it will take time and effort to repair credit. It all starts with your commitment to have it done by:
1-Pull your reports
2-Dispute yourself or by a legitimate expert.
3-and most important work on the areas you can to reestablish your credit.