Raise Your Credit Score
Ways To Increase Credit Score
There is a common misconception that unless your credit score is perfect you can not qualify for a mortgage. A good credit rating is the key to buying power. However, there are ways to improve your credit score and increase your license to borrow.
First, understand that it is not the government that records and stores your credit score; it is credit reporting agencies. There are five major companies that provide this service. Each agency is a private company that gathers information form many sources. Most reports contain some basic information such as your name, address, employment history and your social security number. These lists show any merchants that you have had credit with and your rate of repayment (including any past due comments). The reports normally go back for a period of seven years, except bankruptcies that are held for ten years.
Regardless of what the report says, there are steps that you can take to improve your score. The following are some simple steps to follow to improve your credit score rating.
The most important step - obtain a copy of your credit report and ensure the information is correct. Any discrepancies need to be addressed a soon as possible. While addressing them, ask to have a customer statement attached indicating that the item is in dispute. The credit reporting agencies refer to this as a “consumer statement”. Obtain a secured credit card. A secured credit card is either a MasterCard or Visa that is secured with your savings account. It can be as low as $250 dollars in some cases. Once you have obtained a secure credit card start applying for instant credit or courtesy cards. These are available at many retail locations. As soon as you get an instant courtesy card use it that same day for a minor purchase. The instant card is only a temporary card and you may not receive a permanent card. However if you purchase an item with the temporary instant card and pay it off according to the terms, it will appear as a positive report on your credit. Each purchase paid off in this manner will establish a positive credit mark on your report.
Apply for a credit card you do not think you will be approved for. After being turned down for any credit including credit cards, you are allowed a free copy of your credit report for 30 days with those reporting agencies.
Once you get your credit report from that agency, contact any creditors with negative marks immediately ask them what you need to do to correct the problem. When clearing up a negative credit problem, be sure to get a written statement that they will remove the negative item on your credit report completely. This is known as a “fulfillment agreement”.
Find out which credit reporting agencies are showing the negative items and find a lender that uses a different reporting agency.
Even those with good credit can and should follow these simple guidelines to improve their credit. Remember, your credit rating is your license to borrow. Don’t let it get suspended.
