Power Ideaz

By Arindam Bhattacharya

What’s the usual turn around time to recover your credit score?
That’s your question…your neighbor’s question and the question of millions around you.
Let me answer honestly…it could take seven long years or even more!!!
You might also do it in a year, if you know the tricks that work.
Before you get those power-packed tips to pick up your credit score, let’s take a quick look on some basics which you must know.

What’s credit score?
Credit score also referred to as FICO score is a number based on how prompt you are in paying back your loans. When you have a high score, it means that you can save more money and the possibility of paying your bills on time is quite high.

What should be your ideal score?
Usually, 620 is the minimum standard score that you must have to secure a loan from a bank. If you have a score above 700, you will get loans at lower rates. When your score crosses 760, you will get loans at the lowest rate. The perfect credit score is 850, whereas the average score is 723.

How do you get your credit report?
According to the Fair and Accurate Credit Transactions Act, you can get a free copy of your credit report every year from any of the accredited agencies.
To track any change in your credit score, it’s a good idea, if you ask for your report every four months, instead of getting all the three at a time.

Credit bureaus
Experian, Equifax and TransUnion are three foremost credit bureaus.

Top tips to repair your credit:
• Never apply for credit cards when you don’t really need it. This is because a new account lowers your credit score by 10 points, on an average.

You can have credit cards, but make sure you have it when you are debt free. In fact, your credit score gets a boost if you borrow and repay in the very first chance. Remember that if you neither have a credit card nor installment loans, the lenders might find you a bit risky as you have no record of loan repayment.

• Make sure that your bills are paid on time. If you do this, your credit scores would be up by around 20 points in a month. In case you don’t, it would feature in an area called “Adverse Accounts”, which would show up all details like the particular months, period of delays etc. Keep in your mind that such details are normally kept for 7 years.

• Another effective way you can utilize to ensure a high credit score is by keeping your credit card balances at the minimum. That can save you at least 70 points.

• Make sure that you obtain your credit reports from each of the major bureaus. This is important because, you cannot repair your credit, if you do not know the contents of your report.

• Remember that you have the right to remove any incorrect information that you may find in your report. So, take steps to clean up your report to erase out all erroneous facts

• Never apply for more credits while you are in the stage of credit repair. If you do this, it will have an adverse effect on your credit score.

• It’ll be a smart move on your part if you give a call to your creditors and have an open talk with them about the facts. Always bear in your mind that the many lenders who have a provision which would lower your monthly installments till you are back on track.

• It’s always good if you go for professional help. There are lots of resources available to help you out. You can even search a credit counseling agency through the National Foundation for Credit Counseling.

• Be tolerant to the situation and keep paying your debts. Remember, repairing your credit is a procedure and that doesn’t happen overnight.

I’m sure with these tips; you can really look forward to get your credit in order within a normal time frame.

This entry was posted on Monday, May 19th, 2008 at 7:48 am and is filed under Business Tips, Credit Repair, Making Money on the Internet, Small Business, Uncategorized, Woman Entrepreneur. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.