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Restoring good credit on your own
Rebuilding and restoring a good rating on your credit reports
Good credit should be your #1 goal over the next few years. Increasingly, your credit rating determines where you will work, how much you will pay for (or even get) a home mortgage or car loan, and even how much your auto insurance premiums might be.
Good credit restoration is key to maximizing your financial opportunities in the future. At FindHow2.com, you will find free credit repair tips and step-by-step advice on how to fix your credit score yourself.
See, the good news is that you don't need to pay anybody else to fix your credit reports. You can do it yourself, for free. This website can help point the way to helping you restore good credit.
Credit restoration takes time. As with everything in life, nothing worthwhile happens overnight. And, it probably took you awhile to mess up your credit anyway. So slow down. Get ready for a long, but necessary, process to unfold. Expect it to take time to fix your credit, and to restoring excellent credit in your own name.
In the meantime, you can learn how to re-establish credit, how to budget and get yourself out of debt, and how to keep your credit card balances low.
Once you've learned how to get derogatory marks removed from your credit report, you can keep your credit score high by not letting bills go unpaid, and by not allowing your credit card balances to balloon up again.
The choice is clear: You must restore credit rating to get the best credit loans.
But this doesn't mean you need to spend a lot to do that. Credit restoration is inexpensive when you learn to do it yourself here at FindHow2.com, or it can be an expensive process if you hire credit restoration services to deal with your credit debt.
Credit repair and the knowledge of how to restore credit history are not secrets. Anyone can learn to do this. Consumer credit is an area where there are literally millions of web pages where information is available. For a fee.
Here at FindHow2.com, however, we offer that same credit repair information for free.
Credit recovery, on the other hand, is the final resolution to credit restoration. It is when all the dozens of letters have been sent and answered by credit companies and credit bureaus, and when dozens of emails have been typed to dispute errors and outdated information haunting your credit report.
The simple fact of the matter is this: Credit scores vary up and down, month in and month out, but they are most affected by carrying too much of a balance in relation to your credit limit.
So, if your credit card limit is, say, $2,000, and you carry a $1,500 monthly balance, this act alone will lower your FICO credit score more than having too many credit inquires.
Your long term goal now should be to restore good credit for yourself, and it will take discipline and attention to the small details to keep your credit cleaned up.
Finally, for our free, step-by-step credit repair guide, click here...
Credit Rating Check: Top Three Ways to Boost Your Credit Rating
By David P Walker
Your credit rating is calculated by a credit reference agency. The agency will carry out a credit rating check by compiling information based on a variety of sources, such as the electoral role, financial data and court records. This information is sold onto lenders who will use it to decide whether to lend money or what deals to make available to the customer.
While some people are given bad credit ratings due to defaults on payments or other dubious financial activity, other people cannot obtain a good credit rating despite a consistently reliable financial history. Reasons for this can include not having borrowed money before, giving a lack of evidence to show reliability, not being on the electoral role and having moved house often.
If you have been given a bad credit rating and want to improve it, you can check your own credit report and ask for any mistakes to be amended. If there are no mistakes but you are still registering a bad credit rating, you can start off with these three steps and you'll soon be on the road to a more favourable credit rating check.
1) Register to vote
If you are not on the electoral role, credit reference agencies may not be able to find you. Without being able to measure your credit rating, financial institutions will be reluctant to lend and you may have trouble getting the mortgage, loan or bank account you're after. If you register to vote, you will then be on the electoral role. This means that the agencies can conduct a credit rating check on you.
2) Cancel unused credit cards
While it is good to have a credit card as long as you pay off the outstanding balance in full each month, having too many credit cards at once can be bad for your credit rating. Cut up and throw out any credit cards you don't use as closing these accounts, along with any unused bank accounts, can have a positive effect on your credit rating. Once you've done this, contact a credit rating agency and tell them you have closed the account to make sure it has been removed from your file.
3) Pay your bills on time
This rule applies, as you would expect, to credit card payments and loan payments, but also to any other bills. It is good to have utility bills in your name as this shows you have a fixed address, which is good news for your credit rating. However, once these are in place, it is essential to pay all bills on time. Phone, gas and electricity bills, for example, are forms of credit so not paying these on time will show up when it comes to a credit rating check.
It can be helpful to use direct debits to ensure the payments arrive in time, this can also save money on the bills themselves. If you choose this option, always make sure there is money available in your account to pay the direct debits on the designated dates.
Other important measures to take include having a landline, as this shows you're secure and at a fixed address, and making sure you fill in your details correctly on any application form which is related to getting a credit rating related loan, mortgage or account.
About the Author: Credit Choices helps you make a credit rating check and gain advice and information on how to improve your credit rating.
The case for renting rather than owning your home has rarely been stronger than it is today in America. In most parts of the country, rental payments are lower than monthly mortgage costs. Renting also provides the financial freedom and ability to relocate prized by job hunters who may need the flexibility to go where the jobs are.
Yet one downside of renting has always been that leasing doesn't build your credit the way owning can.
In this credit-constrained economy, having insufficient credit history can hinder your ability to obtain credit or increase your cost of borrowing as much as having a bad credit history might. Having little or no credit history may not be scoreable by traditional credit scores, which often prevents the applicant from receiving several types of credit, including cell phones and credit cards.
Building credit is becoming easier for renters, however, thanks to new developments in the credit world. Your rental history information may now be factored into certain credit scores such as VantageScore.
Your good rental history now counts
Nearly 96 million renters, most of whom pay their rent on time, are not getting the credit they deserve based on their credit reports, according to the National Multi Housing Council. The three national credit bureaus historically factored only negative rental data into an individual's credit report or score, such as evictions and charge offs. Now, Experian has begun factoring positive rental history data into consumer credit scores, thanks to its acquisition of RentBureau, the largest and most widely used credit bureau for the multifamily industry.
This means that positive information that was previously only available to, and used by those in the rental industry, is now factored into credit reports and credit scores for lenders of all types, including auto lenders and mortgage companies. On-time rental payments and your history as a good-paying tenant can now positively affect your credit score.
The data can be helpful to homeowners who may have gone through a foreclosure and need to rebuild their credit while renting. It will also help property owners conduct more effective screenings of potential tenants as past rental behavior is the best indicator for how an apartment applicant is likely to pay rent in the future.
The basics still work
Beyond making sure you pay your rent on time every month, you can rely on tried-and-true methods for building credit, including:
* Pay all bills on time, from credit cards to utilities.
* Establish utilities or cell phone service in your own name, rather than a parent, spouse or friend. In some areas of the country, those new accounts may be reported to the credit bureaus and could factor into your score and report. Conversely, if you fail to pay, no matter where you live the bill will almost certainly be turned over to a collection agency and will negatively affect your credit.
* Obtain a credit card and use it wisely. Simply having an inactive card is not enough to build credit. Credit scores will look at how often you use the card, how much of the balance you pay and if you pay on time. Making small, affordable charges and paying them in full each month can help build your score.
* Have more than one line of credit. One credit card alone isn't likely to do much for your score. Consumers who have fewer than three types of credit on their reports are likely to have lower scores.
* Pay attention to your debt-to-available-credit ratio. Maxing out your credit cards is damaging to your credit scores. It's best to keep your balances as low as possible. Having no more than $5,000 in debt when you have available credit of more than $20,000 will have a less negative impact on your score than maxing out your credit cards.
(Article courtesy of ARAContent.com)
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Credit card facts to help you protect your credit score
The more you know about credit card information, the better you can manage your financial life.
"Separating the myths from reality when it comes to credit card use is an important step on your way to ensuring a good credit history and financial security," says Beverly Ladley, Unsecured Borrowing & Small Business Products executive for Bank of America.
Ladley reveals the truths behind five common misconceptions regarding credit cards this way:
1. Myth: Applying for a new credit card will not impact your credit score, unless you use the card. Reality: There are five key calculations that are combined to generate your credit score. Applying for new credit, even if you don't use the card, accounts for up to 10 percent of your credit score. Frequently applying for new credit can hurt your credit score, so think twice before applying for a new credit card to be sure that you actually want it.
2. Myth: Paying less than the minimum on your credit card bill doesn't count as a missed payment. Reality: If you pay less than the minimum payment on your bill, it may be considered a late payment. Frequently paying less than the minimum will hurt your credit score and make it harder for you to qualify for credit. Check your statement for the required amount due, and always pay it on time to keep your account current. And remember, paying more than the minimum is a great way to improve your credit profile and pay less interest over time.
3. Myth: A high credit card limit is bad. Reality: If you manage your credit cards wisely, a high credit limit can in fact be advantageous. Thirty percent of your credit score is determined by calculating your overall credit card balances as a percentage of your total available credit on all your cards. The lower your debt-to-credit ratio, the better. If you have a high credit limit and you keep your balances low, your debt-to-credit ratio will indeed be low, so a higher credit card limit can help you protect your good credit score.
4. Myth: You must carry a balance on your credit cards to build a credit history. Reality: You must use your credit cards to build a credit history, but that does not mean you must carry an unpaid balance. In fact, your best strategy is to use your credit cards and pay off the bill in full each month so you keep your overall debt-to-credit limit low.
5. Myth: The more credit cards you have, the better. Reality: A wallet stuffed with credit cards can make financial institutions nervous that your spending could get out of hand. You don't need to restrict yourself to just one card, but refrain from opening credit cards - including store cards - frequently. The number of credit cards you carry makes up about 10 percent of your credit score, so having a large number of credit cards may negatively impact your credit score.
Your credit card is more than just a convenient way to make purchases and manage your expenses."By understanding how your credit card behavior affects your credit score, you can take steps to use your card wisely and build your score," says Ladley.
(Article courtesy of ARAContent.com)
A brighter financial future comes with building - and rebuilding - credit
For most people, the keys to their financial future are already in their pocket. While it's true that market fluctuations have an effect on our economy, careful planning and smart habits will take you further than you might have imagined. Above all, taking positive steps today to take care of your credit can help set you on the road to sound finances.
It's important to remember, too, that even if the difficult past few years have taken a toll, you can repair credit. Keeping a positive perspective on the hard work required to improve your financial picture will make the process easier - remind yourself that poor credit doesn't have to last forever.
If you find yourself further along in life without having developed a credit history, don't think it's too late to start. Many young people don't start their credit histories on a good note, and you have an opportunity to make a strong foundation, right from the start. For those people who are new to the United States, establishing credit can be a unique challenge. Many times, credit that's been established in a home country can be lost during the immigration process, so building a good credit history here in the US becomes essential to future financial success.
The sooner you start to build - or rebuild - your credit, the sooner you'll be making a difference in your ability to make important milestone purchases, like cars or a home. But even beyond purchasing power, improving or establishing credit can help build a stronger financial profile that future employers might consider in hiring you. It's become increasingly common for companies that are hiring to check potential employees' credit, as a gauge of their financial responsibility.
Consider these steps to building a positive financial future through credit:
* Using a secured credit card. If your credit isn't as good as you'd like it to be, or if you've never had a credit card, it can be hard, if not impossible, to get one. However, options like Wells Fargo's Secured Card not only act as a payment option, but as a way to build and repair credit. With a secured card, you deposit funds into an account, which is held as collateral. If you use the card responsibly, making payments as necessary, you'll be establishing a pattern of positive use that will be sent to credit reporting agencies, and could improve your credit score.
* Make payments on time - for all your bills. Whether it's for your credit card, your phone, your electricity, rent or other utilities, it's essential to not delay payments. Late and missed payments put your creditworthiness into doubt for the ratings agencies that establish your credit score. It's a good idea to set up automatic or recurring payments to keep you on track - then you'll never miss a due date if a bill goes missing.
* Make a budget and stick to it. To be sure that you can pay your bills - and pay them on time - it's important to establish a budget. Look at all of your monthly expenditures, add them up and compare against your income. If funds are tight, look for places where you can make cuts - both minor and major - to ensure that all your bills get paid.
The most important factor in building and rebuilding credit is perseverance. By taking regular actions to pay bills, manage your budget and use credit wisely, you can look forward to more financial opportunities in the future. For more information on building strong credit, visit Wells Fargo's Smarter Credit(TM) Center.
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