10 Ways To Boost Your Credit Score

1. Deleting Errors in 48 Hours

This is the absolute fastest way to correct errors on your credit report and raise your credit score. However, it can only be done through a mortgage company or a bank. If you apply for a home loan and find errors on your credit report, request the loan officer to conduct a Rapid Rescore. But don't mistake it for the credit clinic tactic of multiple dispute letters.

The Rapid Rescore strategy requires proper paperwork. You need proof that the item is incorrect. It must come from the creditor directly. For example, a letter stating the account is not your account, a letter stating the account was paid satisfactorily, a release of lien, a satisfaction of judgment, a bankruptcy discharge, a letter for deletion of collection account or any relevant evidence.

This is the same documentation a bank or mortgage company would require for the credit accounts anyways. The difference is, now you can improve your credit score and receive a lower interest rate. The results are not guaranteed and will run you about $50 per account.

2. Deleting Negative Credit

This is the infamous area where you've heard of all the scams. Credit repair clinics charge "an arm and a leg" and promise a clean credit report. Sometimes even a new credit profile! People spending hundreds, or even thousands, of dollars for something they can do themselves.

Removing errors is simple. Deleting negative credit that is accurate requires advanced methods. But that is not the scope of this report. So I'll focus on the deleting the negative errors.

Credit report errors easily disappear by using a simple dispute letter. If you have the paperwork proving the error as mentioned above in Rapid Rescore, send copies of that along with the dispute letter. This will make the credit bureau's job easier and you will get faster results.

If you don't have the documentation to prove the error(s), send the dispute letter anyway. According to federal law, the credit bureau's have a "reasonable time" to validate your claim. They will contact the creditor for verification of your dispute. Then the account will be reported accurately - or deleted. It has been generally accepted the "reasonable time" to complete this task is 30 days.

If you're not the do-it-yourself kind of person. Or don't have the time. You could hire someone who is very economical.

3. PiggyBack Someone's Credit

This is a fast and great little credit score booster. But it requires a very trusting relationship. Simply put, someone else adds you to their credit account. For example, when applying for a credit card, you may have seen the section to add a card holder. If your trusting person adds you, their payment history is now reported on your credit report too. If they have perfect credit, now you have a perfect account.

To make this more effective, use an aged account. Imagine if your trusted person has a 10 year old credit card account with a perfect payment history and a balance of only 50% of the credit limit. Wouldn't you love to have this on your credit report? The easy part is your trusted person just calls the credit card company and requests a form to add a cardholder. Once completed and activated, their entire account history and future is now firmly planted on your account. Imagine if you secured 3-5 of these accounts - especially installment accounts. Your credit score could sky-rocket!

The challenging part? Finding the trusted person. Since you already have a low credit score and bad credit, how eager will someone be to make you a cardholder? Even your parents don't want you to damage their credit. But, no one says you need to possess the card! In other words, your trusted person could add you as a card holder and never give you the card or PIN or any information. Since the bills and all account information is still mailed to the trusted person's address, you won't know anything about the account. This scenario could land you many trusted persons. And you still benefit with a higher credit score.

4. Playing Round Robin

This strategy is one of the oldest credit building techniques around. It used to be accomplished with secured savings accounts. But now, it's much easier with secured credit cards. In fact, I've used this method myself.

Here's how it works: Take ,000 (or what you can afford) and get a secured credit card. Once received, get a cash advance of 70% of your credit limit. Get a second secured credit card. Once received, get a cash advance of 70% of your credit limit. Get a third secured credit card. Once received, get a cash advance of 70% of your credit limit.

Open a new checking account with the final cash advance. Use this account only for making payments on your three new credit cards. If you make your payments on time every month, your credit score will increase because you now have three new perfect payment credit cards. (Initially, your credit score might drop a few points due to the rapid, multiple accounts being opened. However, be patient because within 4 months of no new accounts or any delinquencies of any account, you will see your credit score increase. Mine increased 60 points in 60 days!!)

5. Pay on Time

This one is quite obvious. But after 12.5 years in the mortgage business, I discovered it still needs repeating. Your creditors were gracious enough to loan you money. Now pay your damn bills! If you don't, your credit score decreases. EVEN IF ONLY 30 DAYS LATE!

That's right folks. For some reason people think, "I'm only a few weeks late. What's the big deal?" Well, for the loan company, if you pay late but consistent, they make a lot more money with late fees and more interest (if a simple interest loan). For you, your credit score is damaged. If you think long-term and credit score, I'm certain you would not have a cavalier attitude.

6. Pay Down Debts

This seems like an obvious method, doesn't it? But it is not as transparent as you might think. Remember, we're playing with high-level statistics and probabilities which evaluates and forecasts trends in your behavior. Here's what you do...

Never pay off your revolving debt in it's entirety! Isn't that a surprise? Think about it. Your credit score is a reflection of your ability to manage your credit. Paying off your debt is not managing your debt. If you have a zero balance, how can you manage it? You don't. It no longer exists. And you cannot manage what does not exist, right? Therefore, in terms of credit score, you have demonstrated your ability to swiftly pay off accounts to avoid managing them. Thus, slightly decreasing your credit score.

One exception, of course, is if you're over extended to begin with. Pay off what's necessary to make your credit profile look great. Then manage the remaining credit.

7. Don't Close Accounts

Even if you pay off revolving debts, do not close the account. The longer an account is open with no negative reports, the better it reflects in your overall credit score. This is due to the weighted-average in the credit score formula. Many credit experts suggest a balance of 30% of your credit limit. That's ideal. But you can go as high as 70% and still maintain a healthy credit score.

8. No New Credit

You must be vigilant in your credit behavior if you want the best credit score. Therefore, do not get any new credit unless it is absolutely necessary. Each time you apply for credit, an inquiry is added to your report. This usually drops your credit score slightly. When you have fresh credit, there is no track record how you will manage (or pay) this account. Therefore, it's a higher risk which results in a minor drop in your credit score. Remember, your credit score is about risk assessment.

Here's what you do: obtain credit for your housing, transportation, college or continued education and 3-5 credit cards. That's really all you need for personal credit. If you want more credit, request a credit limit increase on your current cards rather than apply for new ones.

9. Maintain A Mix of Credit Types

If you show you can handle different types of credit at the same time, you are rewarded with a great credit score. In other words, get installment loans like vehicle, personal loan or mortgage. Get revolving credit like credit cards: Visa, Mastercard, Sears, Sunoco Gas, Costco. By mixing it up, you demonstrate you can manage your credit because you will have short term and long term credit with a fixed payment. As well as a "variable" monthly payment on your credit cards.

Keep these accounts open with a balance of 70% or less and paid on time and you will witness your credit score climb to great heights.

10. Don't File Bankruptcy or Foreclosure

Here's the most obvious advice: Don't file for bankruptcy or foreclosure. These stay on your credit report for 10 years and always decrease your credit score. The older the bankruptcy or foreclosure account becomes, coupled with re-built credit history, the less of an impact they play on your credit score.

Contrary to popular beliefs, you can legally delete a bankruptcy and foreclosure. It's not easy. But it's possible. See the advanced methods for that solution.

To quickly rebuild your credit history after a bankruptcy or foreclosure, use the Round Robin strategy above and get secured credit cards. Now you can even get a car loan or mortgage right after bankruptcy.

© 2004 David Czach.

-------- Editor's Note ----------

Dave Czach has 12 years experience in the mortgage business and a Bachelor's Degree in Real Estate. He can be reached at http://myLoanHero.com/go.cgi/daveczach.

This article may be reprinted without compensation provided there are no changes whatsoever to the article, the copyright notice and the complete Editor's Note. Any reprinting or duplication without these conditions is copyright infringement.

-------- Editor's Note ----------

-------- Editor's Note ----------

Dave Czach has 12 years experience in the mortgage business and a Bachelor's Degree in Real Estate. He can be reached at http://myLoanHero.com/go.cgi/daveczach.

---

How did a Thief get my Name? Don?t be a Victim of Identity Theft

How do these people get my name? If you have... Read More

What You Need to Know about Debt Negotiation on Credit Cards

Debt negotiation on credit cards is often referred to as... Read More

Which Credit Card?

Bewildered by the sheer variety of debit cards and credit... Read More

Credit Card Debt: How To Control It

A lot of people spend more money than they can... Read More

ChexSystems: Who They Are and How it Affects You

ChexSystems is a company that maintains a subscriber membership service... Read More

To Repair Credit Is No longer Satisfactory - Learn How To Earn A Millionaires Credit In 30 Days...

To repair your bad credit does not necessarily mean that... Read More

Understanding Your Rights Under The Equal Credit Opportunity Act

It wasn't all that long ago that lenders blatantly discriminated... Read More

Credit Traps Snag Consumers

Nearly 20 years ago I worked for a small consumer... Read More

Credit Card Balance Transfers Explained

What is a balance transfer ? A balance transfer can... Read More

The Ghost of Expected Surprises

Here, Cratchet, what do you think you're doing?Uh, er, leaving... Read More

Making Sense of the Information in Your Credit Report

If you've ever applied for a credit card or loan,... Read More

Credit Card Shocker

Have you ever looked at your credit card statement? I'm... Read More

Different Types of Credit Cards and Features - Part 1

Just as there are too many credit card companies to... Read More

Different Ways to Borrow Money

There are many different ways to borrow money. Outlined below... Read More

How To Start A Second SEPERATE Credit File!

Your personal credit file is separated from those with the... Read More

Credit Damage: Getting Compensated for Your Loss

Until recently lawyers for victims of credit damage had little... Read More

Identity Theft Exploding: Here?s How You Can Avoid Becoming A Victim

Americans are more concerned about identity theft than unemployment or... Read More

Figuring Out the Ever Nebulous Numbers Called Credit Scores

Credit Score FactorsThe information contained on our credit reports affect... Read More

FREE Credit Report Offer - Careful, It Might Carry Hidden Charges

FREE credit checks or free credit reports. What are they... Read More

What Happens When Your Credit Is Damaged? Do You Have Recourse?

The good thing about bad credit is that you can... Read More

How Can A Qualified Mortgage Consultant Help Boost Your Credit Scores?

Consumers interested in purchasing or refinancing a home will pay... Read More

Credit and Banking Money Saving Services

The first rule when applying for banking and credit services... Read More

Ways to Look Good without Selling Your Soul to the Credit Card Sharks

1. Buy clothes at thrift stores. BEFORE you buy them,... Read More

10 Tips To Prevent Credit Card Fraud

Imagine opening your credit card statement one morning and discovering... Read More

How to Repair a Bad Credit Rating

If you have a bad credit rating, then you might... Read More

Like It Or Not, You Have A Score To Settle!

Like It Or Not, You Have A Score To Settle!... Read More

Choosing The Credit Card That Is Right For You

Credit cards represent an important part of our financial lives.... Read More

Avoiding Credit Card Traps

The next time you open your credit card statement, take... Read More

How To Save Money On Credit Cards

Some credit cards offer a cash advance option. But how... Read More

Credit Cards - The Basics

How Lenders Operate ? And How They'll Make a Tidy... Read More

Have You Checked Your Permanent Record Lately?

As a young student I feared getting bad grades because... Read More

Maximizing Credit Card Rewards

In their quest to get you to sign up for... Read More

Warning: Todays Non Profit Credit Counselors Are Yesterdays Bill Collectors!

Here's a dirty secret, today's "non profit credit counselors" are... Read More