In 2017 Credit is the new money. Actually money truly does not exist but that is a completely different topic that would garner a blog of its own! However many of us are trying to figure
How To Fix Your Credit In Three Steps
In 2017 Credit is the new money. Actually money truly does not exist but that is a completely different topic that would garner a blog of its own! However many of us are trying to figure out this mystery of so called credit. If you were to take the worlds greatest mathematician and give him a problem like say; "If a person has a 750 credit score and is late on 2 car payments over a 3 month period, on the fourth month what would his credit score be?" I guarantee he could NOT solve that equation! Fair Isaac, the makers of the FICO score, is tight-lipped about exactly how the scores are calculated. But they do give the weights of various criteria that they look at: 35% payment history, 30% amount owed, 15% length of history, 10% new credit, 10% types of credit used. Things that make you go HMMMM! Well now that we have gotten that out the way lets get to some information that can actually be used in real time to get you moving towards a stronger credit score! Now I am going to make an ASS out of U and ME "ASSUME" that you do realize you must order all three credit reports so that you at least know what is on there! Many credit reports contain errors and if you don't pull your report and review it, then you can be a victim of incorrect reporting! The 3 credit bureaus are Equifax, Trans Union and Experian.
The First thing you want to do is Dispute, Dispute, Dispute
This is your first line of defense against bad credit. Remember it is the job of the credit bureaus to make sure they have accurate information and verify it. This is why they get paid the big bucks! It is not your job! So make them do their job. They have rules and guidelines they must follow in order to "verify" your debt and those rules fall under the Fair Credit Reporting Act aka FCRA. Once you have disputed what is on your credit report and properly used the FCRA you will most likely have some things removed and in many cases this will be enough to give your credit score the boost it needs to get you in your dream home or to ride off into the sunset in your dream car!
The Second thing you want to do is to pay down Credit Cards
Credit cards are essential to building credit. I know some people who say "I will never get a credit card" and "If I don't have the cash then I don't need it!" I understand their sentiment, however that is not how the real world works. Credit was originally meant for business owners but because we live in a society of consumers, the generation of today seem to use credit for everything BUT establishing a business. In order to get credit you have to build it! "If you build it they will come" Sorry I couldn't resist my field of dreams reference:) Your credit card debt should NOT be more than 30% of the credit line. So if you have a credit card with a $1000.00 limit you should NOT owe more than $300.00; by keeping your credit card debt low and making payments regularly and on time you will see a great increase in your credit score! If you don't have credit established then go and get a secured credit card which can be used just like a regular card and will be reported to all three credit bureaus!
The Third and Last thing you can do is to ask a family or friend to add you to their credit card
Now this may not be easy but as my father used to say; "A close mouth does NOT get fed!" The good thing about this is that you don't need to get a card or use the account! All you need is for the holder of the account to place you on as a authorized user. This will then boost your credit score just by making you a authorized user and the beautiful thing is that you don't have to ever use the account; which will help the person adding you to sleep better at night! Adding a person to your credit account can seem like a risky or scary thing at first but this is where good judgment comes in. If you are the one adding a person then you would want to make sure that the person you are adding has integrity and is a honest individual, because if they run up the bill; you are ultimately responsible and if you are the person that is being added; then you should be extremely grateful and NEVER use the card without letting them know and then making sure you pay the bill on TIME!
Well that concludes our credit building basics, I hope you have found this information useful and I would love to hear from you if you were able to implement these processes and see some results. For some of us who are too busy to take the time and dispute the dept, we can help for a nominal fee, we also have a Credit Repair Kit that gives you all the information you need to fix your credit on your own and who knows maybe you can help a friend or family member restore their credit which will make them forever indebted to you!