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6/19/2013

Fix Your Credit

Marah Macrocarpus Laguna Canyon,



Fix your Credit
Everything spiny and thorny can be repaired

This post is one of several where I offer consumers methods to improve their FICO score to get a mortgage loan. FICO scores determine a part of the interest rate you can get on a home loan. If you are shopping for a house in Newport Beach, Laguna Niguel,  or anywhere it is time to do a tune up on your FICO BEFORE you get into contract or apply for a mortgage.

·         Opt out don’t let them pull your credit and leave your information in a dumpster, don’t give people your full social security number and full driver’s license number.

 http://www.consumer.ftc.gov/articles/0148-prescreened-credit-and-insurance-offers/

 

·         Apply for a secured credit card: If your situation is that you will not qualify for an unsecured credit card, than a secured credit card may be a great option. Secured credit cards require a deposit into an account to serve as security for the card ($500 or terms according each individual bank). Make all payments on time, as months pass the history boosts your score.

·        
 Become an authorized user on a family members’ credit card:
Being added as an authorized user on a family members’ credit card can help add positive credit. When added as an authorized user, you will be issued a credit card (which I would encourage you DO NOT use) and that trade line will begin being reported on your credit bureau. As time goes forward, you can benefit from the family member’s positive credit. Make sure the family member is using that credit card responsibly so that you are benefiting from a positive score.

·         Credit Unions: Establishing positive credit requires a mix of credit types (revolving and installment).  Often times, credit unions are a more gracious in dealing with consumers with less than stellar credit. Apply for a small ($500 or less), short term (12 months or less) installment loan which, when properly repaid, can add valuable points to the credit score.


Here are some other suggestions on how you can begin making some changes.

· Pay your bills on time. This sounds simple, but this is the biggest thing you can do to keep your score high. Delinquent payments and collections have a major negative impact on your score.
· Keep your balances low on unsecured revolving debt like credit cards. High balances still owed can affect a score.
· The amount of unused credit is an important factor in calculating your score. You should only apply for credit you need.
· Make sure the information on your credit report is correct. If it is not, dispute it with the Bureau Company or lender directly.
· Removing negative accounts on your credit report has the biggest impact on your score.


 

How Credit Is Counted:

· 35% Payment history
· 30% Amounts owed
· 15% Length of credit history
· 10% New credit
· 10% Type of credit


Stay away from small department store cards; they have a low limit and tend to bring down your overall score.
You must use credit in order for it to report to the bureaus


Stay away from Finance Cards- HSBC, furniture, mattress stores and such. Larry is not a good credit reference, it looks as if you were desperate to get no payments for six months.

 If you do not use a card it may be cancelled by the bank – this WILL hurt your score, closed accounts are not positive.



Never use more than 60% of your available credit line

Do not trust car dealers such as CARMAX here in Orange County that tell you they will only soft pull your credit. They will pull ten to fourteen inquiries to purposely make your score go down so you cannot get a car loan anywhere else.

You have a legal rights to dispute anything on your credit profile.

The Fair Credit Reporting Act gives you the legal right to dispute items on your credit reports that may be inaccurate, out of date, incomplete or unverifiable. This process must be completed in writing.

Exercise your legal rights pursuant to the Fair Credit Reporting Act, the Fair Credit Billing Act, Truth in Lending Act, and Fair Debt Collection Practices Act, as well as other applicable Federal Statues. Borrowers with higher FICO scores get lower interest rates.


this is one of 4 posts about credit repair also see  http://cgbarbeau.blogspot.com/2010/05/fix-your-fico-free.html

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