Growing up, I did not have a solid financial understanding of Credit and therefore did not understand its importance. I made several mistakes which cost me years later when my Credit Score reached a low of 510. It is amazing how research and motivation can lead you to transform your Credit Score in a short period of time. If you are currently reading this and you have a low credit score, know that there is much hope for you. Today, I will share with you exactly what I did to drive my credit score up to 750 and how you too can take action to immediately see some progress with your credit score.
Here are the 6 things I did to transform my Credit Score.
1. Obtain Your Credit Report.
I used Annualcreditreport.com to obtain a free copy of my credit report. Why did I use this site? Very simple really, it is trusted and authorized by U.S Federal Law. Every year, all three Credit Agencies (Experian, Transunion and Equifax) are legally required to provide you with a FREE copy of your Credit Report through AnnualCreditReport. The Credit Report will give you a detailed list of your reported Personal Information, Public Records, current and previous credit Accounts as well as credit inquiries. Below is a sample credit report.
2. Note Delinquent & Inaccurate Items.
This is pretty straight forward, however once you have successfully retrieved your Credit Report, review it carefully, making a note of all information that is inaccurate as well as delinquent Items. This can include your name, address, list of creditors and accounts as well as the listed balance on these respective accounts.
3. Dispute & Removal
You are allowed to Dispute any item listed on your credit report as long as this item has an error. E.g; An account may still be listed on your credit report despite being closed years ago or the wrong dollar amount is being reported as the balance. If you are using Annualcreditreport.com, you are able to easily submit disputes directly from the website. While in the dispute process, you will need to select the reason for disputing as well as submit copies of available evidence to support your claim. This process can take as little as 1 week and in other cases several months.
4. Debt Payoff
Once inaccurate accounts are removed or updated, your next step is to address the legitimate creditors. At this point, it is very important to negotiate and confirm a pay- for- delete arrangement with each creditor. This arrangement remove the account entirely from your credit report once the amount owed or agreed upon is paid in full. Be sure to get everything in writing as well as an account closure letter once you have made the final payment.If you are able to, you may pay off the debts in full. Otherwise, speak to the creditor you owe about a reasonable payment arrangement.
5. Removal of Late Payments.
Goodwill Removal of late payment applies to credit cards, auto loans, mortgages and any other credit you may have financed. If you have a history of late payments on your credit report, you may contact the creditor directly and kindly request that they remove the late payment as a good faith gesture. Individual companies will have different approached to removing late payments. Some will easily agree to remove the late payment record, while others will want to see a recent history of on time payments before making a decision and in other cases the answer will be no. This should not discourage you in any way. Think of the worst that could happen is being told 'No'.
6. Establish Good Credit Practices & Financial Habits Moving Forward
The above five listed items are immediate remedies for fixing your credit score. As a continuous practice to improve and maintain an excellent credit score, here are some important points to follow.
Payment ~ Always make Payments on time. Your payment history is the most important factor which counts toward calculating your credit score.
Credit Utilization ~ Every month, credit companies report your Credit Card balance(s) to the three credit bureaus. You want the amount reported to be between 0-10% of your total available balance. This is called your credit utilization and it has a high impact on your credit score. Keep your balance low and the results will start to show almost immediately. If possible, it is even better to pay off all credit cards monthly. If you do not have the means pay off your credit card in full every month or pay it down to a 10% utilization then DO NOT use it.
Credit Monitoring ~ Utilize a FREE Credit Report Monitoring tool such as Credit Karma and review frequently. Credit Karma does not charge any fee however they will occasionally match and advertise various financial products to you.
Secured Credit Card ~ A low credit score can make it quite difficult to get approved for a regular credit card. A great option in this situation is to apply for a Secured Credit Card. A Secured Credit Card will require a Cash deposit but the tradeoff is worth it as the card helps to build your credit. Keep making payments on time and keep your utilization low and in no time with some positive credit history built, your deposit will be refunded. Click here to apply for a Secured Credit Card from Bank of America. For more information on Secured Credit Cards, click to read our article Here
The Writer can be reached by email at: Deana@organikcredit.com
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