We all are, sometimes painfully, aware of the importance of a good credit rating. The current economy has trashed many a formerly decent credit score! If you want to raise your credit score, take a look at these eight easy tips to accomplish just that. While this task isn’t on many people’s short list of fun things to do, it’s really easy enough. Go through this list, step by step. You’ll be glad you did.
1. Get a current copy of your credit report, either online or by stopping in at your local credit bureau. You’re entitled to one free report each year, so this won’t cost you a dime!
2. Go through your credit report, line by line, to ensure that each debt was incurred by you. If you want to raise your credit score quickly, this step is essential. Lots of people skip this step, thinking that items not belonging to them couldn’t possibly slip in by mistake?we’re in the computerized age, right? Well, don’t be shocked to find one, two or even more debts listed that aren’t even yours. A few debts wrongfully attributed to you can make a real mess of your credit rating. Highlight these and immediately make a call, or fire off a letter to creditors claiming you owe them. By law, the creditor must, within 30 days, provide proof that you incurred the debt or remove the item from your credit report.
3. Now, check the remaining items for accuracy. Does the amount owed, shown on your credit report match up with your records? If not, find out where the discrepancy lies and contact the creditor for a reconciliation of your account.
4. If you’re credit card rich and cash poor, you may want to consider consulting a debt consolidation organization, which typically allows you to make a single monthly payment to pay off several debts in one monthly payment which is less than the total amount you’re now paying for the several. This step not only helps raise your credit score, but also improves your cash flow… always a good thing!:)
5. If you have any minor old debts that you’ve forgotten about, use any funds freed up by debt consolidation, or just squeeze your budget any way you can to get these cleaned up. Start with the smallest amount and work them off one by one.
6. How closely does your budget match up to reality? That budget may need a good trimming! Expenses you might not have considered luxuries a year ago can be blowing a big hole in your wallet this year. Be ruthless! Cut out unnecessary expenses. When you’re trying to raise your credit score, your goal is to make your lifestyle conform to your current income.
7. After making the necessary budget adjustments, set aside the money you no longer spend for unnecessary luxuries, in a fund earmarked for use in making timely payments on all your current debt. If you can make a payment which is greater than the required minimum, do it! In any case, make every payment on time. Ironically, you won’t raise your credit score by using the ‘shotgun’ approach to pay off one credit card or other monthly loan payments. Creditors view this as a sign of unreliability! They want the contract fulfilled just as it was set up. Actually, I suspect they really just want all the interest anticipated when the loan was made, ya think?
8. Finally, do not ever make the mistake of applying for new credit when you hope to raise your credit rating. Every time you apply for credit and are turned down or don’t avail yourself of taking a loan you applied for, your credit score goes down.
Follow these eight steps to raise your credit score. You’ll get good results!
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You’ve probably heard the term ‘prepaid credit cards’, which is somewhat of a confusing moniker. Bankers devised this credit marketing vehicle to serve people with poor credit, who were unable to obtain a true line of credit, but needed the convenience of funds on a piece of plastic, to pay for items without carrying a large amount of cash, or making out a check when far from home?many retailers won’t accept checks from out-of-towners. With prepaid credit cards, you deposit the funds with the bank up front. You then receive a card which you can use to buy goods up to the prepaid amount. When the funds available on the card are running low, you simply deposit more funds in order to continue this convenient way of shopping.
You may wonder how the bank makes money on this type of card. With a true credit card, the bank charges interest on the outstanding balance, in most cases compounded daily. With prepaid credit cards, the bank is holding your money, at least until you spend it. The money you’ve deposited allows them to earn interest by loaning it out to other customers, or simply accruing it in a holding company sort of fund. So, they’re making money and you get the convenience.
However, there’s another purpose for which these cards may be used. If you’ve got teenagers in your household, or are a teen, this can be an excellent way to teach, or learn, fiscal responsibility. After all, there’s no option for ‘over-the-limit’ spending, which, with a regular credit card, comes with penalties and a higher APR. You’re limited to the amount you’ve deposited. You need to be careful that you keep close tabs on the amount you have left on prepaid credit cards. If you try to ‘charge’ more than the available funds, the transaction will be declined. Not only that, but the lending institution will make note of this cavalier use of the card, earning you a black mark on your credit report. If you have no credit when you begin using the prepaid card, this irresponsibility won’t help you build a credit rating. If you have poor credit already, this activity only makes your credit rating worse.
When you consider that the majority of new high school graduates cannot balance a checkbook, using the prepaid card becomes a teaching aid. When using your card, be sure to record each transaction as it’s made, so that you know exactly what you’ve got left to spend. Once you develop this habit, you’re far more likely to continue the practice, both in a checking account and with credit cards. It’s a simple matter of addition and subtraction. You don’t have to be an accountant to master the bottom line of your own money!
Now, you’re equipped to purchase prepaid credit cards and use them responsibly. Go for it!
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