Improve Your Credit Standing - Simple Steps
Friday, May 29th, 2009Despite the fact that I make my living as a banker I’m just going to come out and say it: your creditors don’t always seem to be your friend.
They give you money but they charge you for using it. The interest rate and charges are based often on your credit ratings and credit report. How does a potential creditor know your credit scores and history? They get these things from a credit reporting agency. Makes sense doesn’t it? But, is this all there is to know when it comes to your credit and improving your scores? What I present in this article could impact your pocket book forever.
As reported in the documentary film “Maxed Out” the credit reporting agencies are paid by creditors to report your credit score. They do have a need to you to mend something that is inaccurate on your credit score, but you’ve got to question it first.
They make it easy to get credit, and then “make” you keep it. If you look at what has occurred in the last fifteen years, more and more people got visa cards. At the same time, private bankruptcies skyrocketed. Credit card companies were making profits hand over fist, but as private bankruptcies started going up things started to switch. Credit card companies started getting squeezed and they didn’t like it. They didn’t like it such a lot that according to the documentary film “Maxed Out” it was MBNA, a credit card company, who pushed the new bankruptcy law through Congress in 2005. This law made it harder than ever to file a private bankruptcy.
Second, with this history under consideration, let’s look at some things that you can do to impact your credit ratings and credit report the card firms and reporting agencies won’t tell you.
There are effects to having certain kinds of visa cards. You must consider what sort of credit card to get. Do not get department store credit cards. Often they are looked at unfavorably in your credit report by lenders because these cards are given to just about anyone with a social security number. Get two Visas or Mastercards from Bank of America, Citibank, Wells Fargo, and/or Discover. These cards will go a long way to helping you establish credit, improve your credit worthiness scores and ratings. Ensure you use these cards thoroughly and pay them off every month. Do not have more than 3-4 of these cards.
Opt out of Credit card offers. Not only will you be saving a tree but your credit report might go up simply by opting out of receiving the credit offerings. Go to OptOutPreScreen.com and fill out the info. You should be dropped from a majority of contact lists inside 2-3 months.
Get a prepaid cash card. What’s great about this credit solution is that you have to have the money in the bank to use with your card so you can only buy what you are able to afford. Also, most prepaid ATM cards do report to the credit reporting agencies. You may also use this account to set up payments for your utilities, cable, telephone, and web access etc.
Do not cancel your old credit cards. When you cancel a card, your credit report goes with it. It should not cost anything to keep it anyway. If you hate the idea of having it, just tear up the old card. If the card company tries to charge you a yearly fee, just tell them you want to cancel it. Most likely they will just waive it.
Keep your Visa card balances low. Just because you have a credit card doesn’t mean that you’ve got to use it or have it maxed out. As a rule of thumb you do not need to go over thirty percent of the available credit arrangement and at the absolute max, fifty percent. So if you’ve got a card that has a $10,000 limit, at the most you would not need to have more than $5000 charged on the card.
Limit your credit investigations. Don’t run around town and let every department stores or car dealer run your credit.
Finally, there is one more piece of the puzzle most people continue to overlook. Everyone needs to stay on top of their credit history. How can you do this? By signing up with a reputable company that makes your information available to you. There are a few to choose from but you should choose wisely.
Here is a LINK to the firm I use and highly recommend.
Checking your history, changes, etc., and making sure no strange activity makes its way into your report is a mandatory proactive action you need to take these days.
You wouldn’t operate your computer without proper anti-virus protection in place that actively monitors your computer and keeps it safe - so why would you not do the same with your critically-important credit history?
