How to Raise Your Credit Scores Without Breaking the Bank

Posted on June 26, 2009
Filed Under Finance | Leave a Comment

The airwaves are full of commercials promoting knowing and raising your credit scores. Although the word “free' is commonly used, most of these services end up charging a substantial fee. There is a better and much cheaper way. Here's a simple plan to know and raise your credit scores without breaking the bank:

If you have no or low scores below 620…
Open 2-3 credit accounts with companies that report to the credit bureaus. Even if they are “secured” credit cards, the end result of having or raising your credit scores is worth it.
Pay all your bills on time including cell phone and utility bills.
Keep your credit card balances below 30% of your credit limits.
Do not close accounts because that can actually lower your credit scores due to your overall available credit declining.
Ask a family member with long good credit if they will add you as an authorized user. Their long and good history can significantly raise your credit scores.
Check your credit report at annualcreditreport.com for errors and dispute them by faxing in documentation which supports the truth.

If you'll take those steps, your credit scores will begin to rise in 30 days or more. The short term goal is to at least reach 620, and the long term objective is to be above 740.

But what if your scores are extremely low due to catastrophic credit issues? Here's what you do:

If you have bankruptcy, foreclosure, or other serious credit problems in your credit past…
Go to annualcreditreport.com and see what is reporting on your credit report.
Dispute errors such as dates, owed balances,and any accounts included in bankruptcy.
Fax in your bankruptcy schedules and discharge to the credit bureaus.
If information about your foreclosure, short sale, judgment etc. is inaccurate, fax in as much documentation as posible. The credit bureaus will investigate and mail their findings to you in approximately 30 days. If you need your scores to rise ASAP, inquire with the credit bueau(s) about doing a “rapid rescore.”
Reestablish perfect credit by paying all your bills on time.
Follow the above plan for consumers with low or no scores.

Whatever your credit situation may be, the above plan works. Remember…your credit didn't go below 620 overnight, and you won't rise above 620 overnight. But with time and your hard work and responsibility, your credit scores will climb to where you and the lending industry want them to be.

Paul Storm has facilitated the credit recovery of thousands of consumers during his decade in the finance industry, through his radio program “Credit 911″, national seminars/workshops, and as the author of “Finding Your Way Back: The Credit Recovery Road Map.” To learn more about Paul Storm go to http://www.credit911live.com

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