Need a Quick Credit Fix? Here are Three!

Your credit score is the key that unlocks the doors of opportunity. If your score is less than ideal, you can be turned down for a mortgage, get denied for a business loan, and miss out on a better job.

What is a good score? Anything over 750 is considered “very good”. Above 700 is “good” and scores below 650 are considered “poor”. So… aim for 650 at first and then work like crazy to get over that 700 mark.

Before you can start improving your score, make sure everything looks ok on your credit report. Order one for free from www.annualcreditreport.com. Look for collections that are more than 7 years old, bankruptcies older than 10 years old, accounts that you do not recognize, civil judgments or garnishments that are not yours, or any errors in your name or contact information.

If you do find something amiss, contact the credit reporting agency issuing the report or the original creditor. Each has their own rules for filing disputes. If you need advice, we’re here. Just call 770-952-5168 or contact us online.

If you do not know your what your score is currently, first look at any recent credit card statements. Many companies now print your FICO score right on your statement. If that’s no help, hop online to one of the three major credit reporting agency’s websites and sign up for the free or low-cost trial of their credit monitoring service. [Experian, TransUnion, Equifax] Make sure you choose an option that comes with a free copy of your report AND score.  Be sure to cancel your account before the trial period ends, or you will have to pay the monthly fee, which can be as much as $69.99.

Now that you have addressed errors on your report and know your score… it’s time to GET BUSY!

Quick Credit Fix #1: If your balances are too high

When your balances are all nearly maxed out, you look look like a bad credit risk. A quick fix for high balances is to transfer a portion of your highest balance card to a promotional 0% card. You will instantly raise your total available credit without increasing your debt.

A word of caution… that new card with a 0% rate will be a huge temptation. Do not go on a shopping spree! This trick only works if you do not add on any more debt.

To make this quick credit fix stick long term, work out a budget that allows you to pay extra toward your credit card debt each month. The goal is to reach a 10% Utilization Ratio – meaning you only use 1/10 of your available credit. So, on a credit card with a $5,000 limit you want to keep your balance below $500.

Quick Credit Fix #2: If you have late payments

One or two late payments will not tank your score, but if you have any late payments your score will suffer. Your payment history accounts for more than 1/3 of your credit score.

To reduce the effect your late payments, ask a friend or relative with a good, long credit history to add you as an authorized user on one of their oldest cards. DO NOT get a copy of the card. Just adding your name to the account lets you legally “borrow” their good credit score to boost yours. You never have to actually use the account for this quick credit fix to work.

Quick Credit Fix #3: If You can’t qualify for a credit card to start building a better score

You need a credit card to build a good credit score… but if your credit is damaged by medical collections or auto repossessions, getting a credit card is difficult. The quick credit fix here is to visit a bank to get a secured credit card with a $300 to $500 limit. You will secure it with cash you deposit into an account at the bank.

Once you get the card, use it regularly, but pay it off every month BEFORE the due date. Even better, make payments every two weeks. If you have no other credit cards on your credit report, this will give you a sizable boost for two reasons. You will improve your “credit mix” by adding a credit card (revolving balance) and you will start establishing responsible payment habits.

These quick fixes will help you achieve short term goals or jump start your credit recovery. To make the results last… pay down your balances… keep them low… and pay on time every month.

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If you have any questions, please give us a call at 770-952-5168 or contact us online.

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Like what you read here? Check out these other articles:
Why The Big 3 Credit Reporting Agencies Are Not Your Friend
Keeping the Wolves at Bay – Safely Communicating With Debt Collectors
Starting Your Dream Business When Your Credit Is A Nightmare

This information is intended for informational and educational purposes only and not as legal advice. If you have concerns about your credit report, harassment, identity theft, illegal collections activity, garnishments, or property liens, you should consult an attorney who specializes in consumer rights and defense.

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