Many Americans are unaware of the methods that can be used to improve credit scores in a short period of time. Congressional laws have given people with bad credit the opportunity to restore their credit in much shorter time frames. Today, many consumers do not qualify for home mortgages, auto loans, even employment opportunities, because of less than perfect credit. United States credit repair laws can help, but most people do not know their rights under these laws. Currently, 70% of all Americans have compromised credit. Nearly 90% of Americans have errors, outdated, or fraudulent accounts on their credit profile. The threat of identity theft continues to rise, and skyrocketing personal debt, combined with multiple defaults on consumer credit accounts, have put the U.S. economy at risk. Fortunately, consumers can take action on their own behalf to remedy some of these problems.

In order to improve your credit score, it is important to ascertain your current financial situation. You are entitled to one free credit report per year, by FTC mandate. Once you know your credit score, and have checked the report for errors, there are some steps you can take to begin raising your credit score. First, pay down your credit cards. Paying off your installment loans (mortgage, auto, student) can improve your score, but not as dramatically as paying down, or paying off, revolving accounts like credit cards. The credit-scoring formulas look for a substantial difference between the amount of credit used, and your available credit limits. Getting your balances below 28% of the credit limit on each card is crucial. Pay down the cards that are closest to their limits. Make certain to limit your purchases, large credit card statements can hurt your score, regardless of full payment each month. What is used to generate your score, is the balance reported on your last statement. This does not mean paying your balances in full each month isn't fiscally responsible, however the credit score does not recognize this. You can increase your score by limiting your charges to 28% or less of a card's limit. Always be sure to check your credit limits on the report, your score might be unnaturally deflated if your creditor is showing a lower limit than you actually have. Most credit card issuers will update this information upon request. Try paying your balance down or off before your statement period closes. View your last statement to see which day of the month that falls on, then about a week in advance of closing, remit the balance in full. Doing so won't raise your reported limit, but it will increase the ratio between that limit and your closing balance, which should increase your score. Third, use your older cards. Accounts that were established more historically, are given more weight. If you stop using your oldest cards, the issuers may cease to update those accounts at the credit bureaus. The accounts will still be live, but they won't be given as much weight in the credit scoring formula as your active accounts. Use your oldest cards every few months to charge a small amount, paying it off in full when the statement arrives.

Page 1 of 2 :: First | Last :: Prev | 1 2 | Next