Maximizing Credit And Scores
There is no doubt that you know someone who has “Awesome” credit, just as you know someone who doesn’t. Looking at them side by side, you probably couldn’t tell the difference without “Walking in their shoes for a day”. “Bad credit” means you simply can’t get anything unless you pay for it in cash, or you pay that “Ridiculously” high interest rate.
Even if your credit is challenged, you can still change it by beginning a new. Reestablishing good credit takes time, but can be done. Total credit revision can take 7 to 10 years, but is well worth it. You will actually see results in 1 to 3 months!
Remember, if you already have excellent credit, your file will naturally “age” creating higher scores. Credit “aging” is one of the most important aspects of credit scoring. The longer your credit history builds, the larger your individual credit profile becomes. The key to getting the maximum amount of scoring will happen if you follow these basic principles.
Naturally, make on time payments for all of your accounts. If you find yourself 30 days late or more, there is simply no way to fix it. “Age” will address it and you should simply move on to setting a goal for preventing it from happening again.
If you dispute something, it may be a much better “Credit” decision to document the dispute, send it certified mail, get a return receipt and make the payments until the dispute is resolved. By not paying, and a creditor reporting this, it becomes that much harder to “clean up” the mess that may be left in your credit file. (Never Pay Fraudulent Charges without first consulting an Attorney!) You literally could create hardship for yourself by not paying the debt until resolved because now there is a credit “nightmare” to clean up, not to mention the impact it will have on your credit scoring model. Especially if you “lose” the dispute.
Contrary to popular belief, closing revolving accounts that you don’t use, can in fact lower your score more so than carrying an open account which reflects a zero balance. Part of the scoring used in credit profiles is based on the “age” of active accounts. Having a good mix of “Old” credit paid on time is ALWAYS a positive. By closing an account, that file becomes inactive and you will lose, over time, most of the utilization benefit. If you can, periodically use the card to make a purchase and pay it off when the bill comes due. This is an easy way of creating a long term history with credit you don’t use.
Continuing down the road of credit cards. To high a balance versus available credit will actually LOWER your credit score significantly. The IDEAL balance to carry on revolving accounts, “Perfect” for credit scoring models, is in fact 25% of the total available revolving credit. This will maximize the scoring for a revolving debt. If your credit card company raises your limit, don’t be afraid to call them and instruct them to lower the limit to what you believe is reasonable if it fits outside your model.