A Few Rules To Enhance Your Credit Score Starting From Scratch
November 16, 2009 by Marc Marseille
Filed under Credit Score
Your credit score is the single most important factor that decides your financial success. The process of re-establishing your credit rating after having suffered a job loss or some sort of family emergency may seem impossible, but the truth is starting from scratch is more simpler that you think. The hard part when it comes to starting over and raising your credit score is maintaining a consistent payment regimen with the credit bureaus.
The first step to raising your credit score is getting a copy of your free triple score report. Once you have copy of your report, it is important to examine your report thoroughly for mistakes. You should never assume that you report is accurate. You will be surprised at the amount of mistakes on your report. Some of the most common errors may include: reporting late payments erroneously, listing the same negative account multiple times, and reporting a family member’s account on your bureau. The best way to deal with mistakes on your report is to consult with a credit attorney.
The second step to raising your credit score is adding some positive accounts to your report. Even if all your negative items are removed or expire from your credit report, you still need to have some positive accounts to produce a rating.
A secured mastercard or visa is one way to add a positive item on your credit report. A secured credit card works the same way as any other credit card except for the fact that your limit will equal the amount of a security deposit. In many instances some banks offer a 25% or $100 increase on top of your initial credit card limit. Secure credit cards also report to all three credit agencies without disclosing the fact that your card is secured.
Step number three is a little technique that is rumored to soon be obsolete but for now still works. This technique involves getting a spouse or family member to add you on their account as a co-applicant, assuming that they are paying on time. The only problem with using this technique is if they actually stop paying on their account, it will also reflect negatively on your credit report.
The fourth and final step to raising your credit score is making your payments on time. When creditors are looking at your credit report, they tend to look at your previous six months of payments. Your current payment history will give borrowers a picture of your present financial standing.
The key to a complete credit restoration is 2 years of on time payments. The credit reporting agencies increase your score for every month that you continuously make payments. If you are able to pay on your bills for 2 years, you will be successful in completely overcoming your bad credit days.
In summary, to take control of your financial future, you must first take baby steps. These steps include getting a copy of your report, removing bad accounts, adding good credit history and paying your bills in a timely manner. You may also want to consider step #5; getting identity protection to protect your good credit score.
For additional info on how to order free credit report you can go to how to improve your credit score.
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