Improving Your Credit Score: 2. Use Your Credit Sparingly

Everything in life should be done in moderation; too much of any one thing is never good. There are health benefits to drinking wine, but drinking too much of it will lead to drunkenness. Eating sweets is good, but too many sweets will lead to tooth decay, a hurt stomach, and massive weight gain. Medicine is good for the body when it is sick, but too much medicine leads to an overdose and early death. Even exercise is good, though too much of it can lead to muscle strain, damage, and an extended recovery time. No matter how excellent the quality of any activity or item one pursues in life, too much of the object, person, or activity will be harmful. The secret to life is to find the right balance between many things.

The same can be said when it comes to your credit. What is credit? Essentially, credit is the amount of purchase power a consumer has when he or she enters a store to buy something. Credit (purchase power) is measured by way of what is known as a credit score. Credit scores range from as low as 300 all the way up to 850, and many consider the high 700s to be an excellent credit score. 620 is consider to be an excellent score in many cases, though the score itself depends on a number of factors. To see credit score ranges and evaluations, go here.

Excellent credit scores allow you to purchase an item, pay some initial fee, and pay the rest off each month. Without excellent credit, you are forced to pay the item off immediately. For many, finding the funds to pay for a large item in full (say $2,000-$3,000 and up) may present a financial challenge that can be hard to overcome. Having excellent credit, then, is one way to ease your peace of mind to have nice things in life.

Many would not know it, but there are a few sources from which you can draw credit: credit cards, debit cards, charge cards, department store cards, mortgage, and so on. Each time you apply to get a department store card or credit card, companies perform a credit check to see if a consumer has an acceptable level of purchase power. If the consumer does, then all is well; if not, a consumer will be rejected and cannot access a monthly finance plan for the intended item or service.

Let’s take an individual whose credit score is in the high 700s. The individual has checked his or her credit score, knows that all is well, and goes shopping to afford as much as possible. The first time the individual goes shopping, he or she does not choose to purchase furniture or electronics, but opts instead for credit cards. The individual decides to go get three or four credit cards thinking, “I’ll have enough credit money when times get hard so that my bills can still be paid.” One or two credit cards (max) is sufficient, but three or four cards can spin a person’s finances out of control. Think of all the interest percentages attached to each of those credit cards and that each month, you will need to pay back on those credit cards. To many, credit cards seem to be the way out of financial debt; in reality, credit cards may dig a deeper hole for you and place you further into the ocean of debt than you can swim out of it.

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Improving Your Credit Score: 1. Pay Your Bills On Time

The economy has seen its worst days in our past. Ten years ago, an eighteen-year-old could borrow his or her own educational loans for college without credit of any kind. Today’s young adults must have cosigners in order to qualify for educational loans of any kind. It goes without saying that the times have indeed changed.

With economic decline comes a change in credit rules. There was once a time when paying your bills on time determined your credit score. Not so today. Today’s credit scores are determined by more than just your monthly bill payments; now, your occupational income and property play a role in your credit score as well. However, despite the additional factors of credit scoring, on-time bill payments still qualify as a determining factor of credit score success or failure. Bill payment is one factor that, among a few, determines the amount of purchasing power a consumer has in the consumer world. It is thus important that a consumer boost his or her purchase power as much as possible.

How can consumers become better at paying their bills on time? One way consumers can improve bill payment time is to keep a calendar with them of their appointments and “things to do.” Technology now features “mobile calendars” that buzz us, sound an alarm, or send off a ring tone when you have an appointment, an important conference call or business meeting, or a reminder of something you need to do (such as take out the garbage or pick up groceries from the store). Place the due date of each bill on your mobile calendar (whether you have a smartphone, flip phone, iPad, etc.) and set the alarm to go off on the day your bills are due or the week your bills are due. This will remind you publicly that your bills are due on a certain date. You may want to set your alarm early and pay the bill early in order to avoid late payment and late fees.

 

Another way to improve your bill payment time is to place your bill payment reminder for each bill on the same day. This will prevent forgetfulness. It is easier to manage ten bills that are due on one day of the month versus ten bills due on ten different due dates. If you have as many due dates as bills, you will most likely pay some early and some late. Set one day (whether the tenth day or the twentieth day of each month, for example) as the day to pay all your bills.

Two other ways to pay your bills on time consist of automatic draft and Bill Pay. Automatic draft is an option whereby a company grants you the choice to have the money for your bill drafted by the company each month from your checking or savings account. This is an excellent option if you have constant forgetfulness and would rather have the company draft your money so as to make your payments on time. Bill Pay is an option provided by banks whereby the banks will remind you each month when you have a bill due. Banks understand the significance of on time bill payments and what it means in terms of your ability to purchase conveniences for which you may not have the money right away.

No matter the plan you implement to increase your remembrance of bill payments or the draft plan in which you enroll, the goal of it all is to raise your credit score and increase your financial security. There is nothing in the world quite like having the purchasing power to get what you need when you need it.

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Credit Monitoring

It is certainly no secret that people in this country have been hit hard by the waning economy. The defunct housing market, banks crying for government bailouts, companies outsourcing overseas, free trade agreements, it all trickled right down in the end to the consumer, the everyday guy or gal that just knew his or job was solvent was all of a sudden told ‘Your services are no longer needed,’ which turned into massive layoffs in so many regions across the country. Within the past five or ten years there have been tens of thousands displaced workers, and even though it’s been a few years, people continue to suffer economically.

Economic hardship has turned into, for many, both mental and physical anguish. People realizing just how dire their circumstances have become are painfully aware of their circumstances turning into economic catastrophe because, let’s face it, without a paycheck how do you pay for even the most base needs—shelter, food and clothing. To make the situation even more frightening is the fact looming over head—‘And what about my good credit?’

It seems the worse the economy has become the more the media has focused on the credit conscientious, making it perhaps even worse for those who want answers on how to deal with unpaid bills or simply trying to stay financially afloat before they and their credit history land right in the toilet.

The media has done a lot to alert the public through articles and blogs en masse about predators waiting to pounce on the disenchanted who are at this time the most vulnerable; hackers, con artists, sham entities claiming for a fee that your problems will be resolved if you only let them do the worrying for you, for a fee, of course, but do nothing except take your money, offer a few words of advice, perhaps make a phone call or two to creditors on your behalf, so they said, but after excuse after excuse after excuse and still nothing was resolved, you, the subjugated “client” had come to the realization that you were just plain ol’ “bamboozled.” It was all a bunch of baloney, and there you are still left asking yourself once again, ‘Here I am still left in dire straits and even out more money that I paid to a company who did nothing but take advantage of me.’

It is really enough to make even the most optimistic of individuals shed a tear or two. And all the while credit report monitoring services have been bombarded with people seeking answers. And the question remains still for so many…’What do I do now?’ Most egregious, however, are the companies out to “get” the people who they know are in desperation mode or close to it.

Shane Romig for Credit.com  wrote in his article “The Truth About Credit Repair” at http://www.credit.com/credit_information/credit_help/The-Truth-About-Credit-Repair.jsp began the article with a familiar tactic used by these unsavory entities claiming: “Credit problems? No problem!” “We can erase your bad credit — 100% guaranteed.” “Create a new credit identity — legally.” “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”

Does all this sound too good to be true? Well, it is. These are the typical claims of shady credit repair organizations (CROs) which often victimize unwary consumers – usually, the most vulnerable consumers who are struggling with bankruptcy or have had problems rebuilding damaged credit reports and credit scores.

Mr. Romig tells it like it is, and after all that has happened—you were blindsided and humiliated by the seedy false entity claiming ever so sincerely to want to help you—do not write off all credit repair services. There are many reputable ones available. And once you do find viable counsel who does have your best interest at heart and will sincerely help to try to put you on a path that will steer your credit around with sound advice it is then time to seek out a reputable credit monitoring service.

Credit monitoring service is In fact a good idea for anyone, regardless of circumstances, wanting to know the facts, especially for those who have had to let bills lapse or who have had to drastically change their spending habits. For those concerned about their credit history there are some excellent online resources. For more information and a comprehensive question and answer section as to why it is a good idea to seek out a reputable company that truly does have the consumers best interest at heart check out Best Credit Reports dot com, http://www.bestcreditreports.com/, for some sound advice.  Why this company you ask? Click on the link and read the “real” deal about credit and how to maintain your good credit and why it is such an important aspect of your life to remain intact.

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How To Build Your Credit Score With A Loan

If you are super credit savvy, you won’t even be deliberating over whether a credit monitoring service is for you. Being on the ball is the best way to make sure you don’t miss a trick as far as your financial health is concerned. However, if you have noticed that your score is not quite as high as you would like, but can’t figure out why, it may be for a very simple reason: you are not doing enough. That means you need to build your credit score up.

To many it may seem illogical, but not to the credit industry. If you have been well behaved by steering clear of loans, cards, and overdrafts, those who may look to lend money to you in the future don’t have anything to go by when it comes to lending to you. They need to see that you are capable of managing anything that has been given to you in terms of financial responsibilities, which means you need to try and live a little.

Now before I go ahead and explain what it is that you need to do, I feel I need to justify why you need to do it a little. A lot of your freedom depends on credit; from getting a card that is available for emergencies, there are other areas of your life that are affected by credit. For example, you  may want to get a cell phone contract, or you may want to rent an apartment. Sometimes, employers will check your credit history to see if you are who you say you are. So, a lot really does depend on having great credit. Now, let’s get down to business…

Recently, more and more people have begun taking out credit building loans. Now these loans are a little strange; those who are members of credit unions can take them out, but rather than getting the money up front, they get it once the loan has been paid off. It is a win-win situation, you get to build your credit rating, you get money at the end, and you don’t run the risk of defaulting payments.

Of course, if you aren’t up for such a unique way of building up your credit rating, now is the time to try some of those more standard ways. For starters, you could take out a low interest credit card. By making a few purchases, and then paying them off, you will be able to show future lenders that you are worth lending to. It really is a case of spending a little, for quite a lot of gain. Now you may be worried about paying interest, and with that you can be sneaky. Rather than wasting your hard earned cash on lots of interest, get an interest free card and juggle the balance a little.

By the time you have invested a little time and effort, you will see via your usual credit monitoring report that your score has risen. Even if you don’t use it immediately, it will be of great benefit to you in the future.

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Disputing Your Credit File Made Easy

Like many things in life, it is sometimes the case that the three major credit agencies get things wrong when it comes to your credit report. Now we all make mistakes, but if TransUnion, Equifax, or Experian have got something wrong, you will find that accessing finances is difficult. So, rather than letting them get away with it, you need to step up your game and challenge what they have incorrectly recording. The best credit monitoring services will allow you to see what all three agencies have got to say about you, so monitoring your credit file is the best place to start.

First of all, you need to know who you will be disputing your reports with. It is best to approach all three agencies, even if only one currently holds the mistake on their system. By doing this, you will ensure you have a case against them, as well as the creditor who has incorrectly recorded information. By law, you cannot approach your creditor with a case if you haven’t disputed with all three agencies. So, by contacting your creditor, and all three agencies, you will be on your way to having a clear credit file.

Next, you need to make sure you approach them in the right way. While it is possible to try and dispute any mistakes on your credit report, it is better to have a solid paper trail. Agencies are not great at forming investigations, so you need to make your case as solid as possible.

Once your case has been resolved, each credit agency will have three days to write to you and let you know what has happened. If you really want to keep yourself up to date, use the best credit monitoring service possible to make sure you get real time information. Not only will this allow you to see when the error has been removed, it will also allow you to ensure that each agency responds when they say they do.

Finally, if the agencies you have approached do not act as you would expect them to, consider hiring a lawyer. While it is always better to do most of the leg work yourself first, a mistake remaining on your credit report is not something that you need to take lightly. By leaving mistakes on your credit reports, you will be preventing yourself from being able to access credit in the future. Although the mistake is someone else’s, it is only you who can rectify it. Besides, those pesky credit bureaus are far more likely to buckle in the face of legal action.

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