Credit RepairAt Pay It Forward Financial we offer free credit repair advice to all of our clients. We use state of the art credit repair software to assist you in improving your credit score. Increasing your credit score is directly linked to lowering your interest rate. After a detailed reveiw of your credit report we then isolate and input your pertinent information into our credit repair software. Finally, we provide you several plans for increasing your credit score. In many cases simply transferring balances between credit cards will dramatically increase your credit score. Our free credit repair advice is just another way we 'Pay It Forward' to you.
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Eight Quick Credit Tips
to Combat the Credit Crunch
1. Apply for business credit cards
Most people don't realize that over 90% of business credit cards do not get reported to personal credit reports. If they are not reported, they are not scored, period. Many people run their businesses from their personal credit cards and as a result their credit score suffers. You don't need a big company to get approved for a business credit card; it is much easier to get approved than most people think. Once approved, you can move your personal credit card debt over to the business credit cards and watch your credit score go through the roof once everything is updated on the credit report.
2. Settle for deletion, or at least zero out all unpaid collection accounts less than 24 months old.
You need to pick your battles as to which accounts you focus on during the credit crunch to assure your credit score increases is enough to get their loan approved. That is why we use our extensive credit repair software and knowledge to ensure it is done right the first time. When payment is made on a collection account that is less than 24 months old, the score will either stay about the same or increase a few points. Settling in exchange for deletion is ideal, but not always possible. Given the fact that the collection account will keep selling to other collection agencies in the future, it is best to deal with it while it is still young.
3. Make sure you get rid of all your past due amounts on non-collection/charge-off accounts and make sure you pay before the due date until after the loan closes to be safe.
Within the delinquent accounts on your credit report, there is a column called 'Past Due'. Credit Scoring software penalizes you for keeping accounts past due, so past dues destroy a credit score.
4. Get rid of your late payments.
Contact all creditors that report late payments on your credit and request a good faith adjustment that removes the late payments reported on your account.
5. Ask for a credit limit increase on your credit cards and either pay-off if possible or at a minimum evenly distribute the balances you are carrying on your revolving debt.
Credit scoring software likes to see borrowers carry credit card balances as close to zero as possible and also see that they have been trusted with a lot of credit - which is why increasing your credit limits is good. If you can't afford to pay down your credit card balances, then evenly distribute your credit card balances among all of your credit cards rather than carry a large balance on one credit card.
6. Do not close your credit cards
Closing a credit card can hurt your credit score, since doing so effects your debt to available credit ratio. For example, if you owe a total credit card debt of $10,000 and your total credit available is $20,000, you are using 50% of your total credit. If you close a credit card with a $5,000 credit limit, you will reduce your credit available to $15,000 and change your ratio to using 66% of your available credit.
7. Keep your old credit cards active.
15% of a credit score is determined by the age of the credit file. Fair Isaac's credit scoring software assumes people who have had credit for a longer time are at less risk of defaulting on payments. Therefore, even if old credit cards have horrible interest rates, closing those cards will decrease the average length of time a client has had credit.
8. Pay down Negative Amortization mortgage balances below the original amount borrowed to increase the score
Most people don't realize that owing more than the original amount borrowed on a loan is a negative event to the credit score.
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