Off Topic: Want better credit?

Everyone is entitled to a free annual credit report from all three major reporting agencies: Equifax, Transunion and Experian.

Because these three agencies share data, a report from any one of them is sufficient. Though your score may be different due to weighting, the data is usually the same, or close.

So every four months, I pull one of the three reports from http://www.annualcreditreport.com and make sure there isn’t anything on there that I don’t agree with. Everything that’s negative gets challenged, three times a year or until it goes away. By the way, if the institution misses a challenge, it comes off of your report.

You’d be surprised how often you find a report on there from a collector that NEVER tried to contact you, which can drop you as much as 100 points. I went through this for three years with AT&T – they were convinced I’d had a cell phone with them, and it took a letter to the collector and to AT&T every year to get the item removed. When it finally was, my credit returned to where it’s supposed to be.

Another thing for the weak of credit: every six months you should have your credit card limits increased as high as you can get them. Why? Because if you are over 20% usage on your total revolving credit, it lowers your score.

That’s right, my droogies: you have three cards worth $500 each because you’re rebuilding your credit, and that’s all they would allow you. If you have $110 on each card, you’re taking a credit hit. If you max one and the other two are clean, you’re actually taking an even BIGGER credit hit. For someone with, say, $30,000 in credit cards available, at the end of the month you want to have a combined balance less than $6,000

You also take a credit hit for a balance at the end of month of less than 1%.

However, if you don’t use the credit, they won’t give you more, so what do you do?

You use credit cards like an elastic account. Around the first, you pay your utilities off on your credit card and, before the last week of the month, you send the check that would have gone to the utility to the credit card. Not only does this rack up bonus points on some cards, it makes you eligible for an increase AND doesn’t touch your score.

Advertisements

One thought on “Off Topic: Want better credit?

  1. I’ve never had a credit card. Never needed it. In college I applied for one, got it, but never used it (which I regret). Now when I tried to get one, they wouldn’t give it to me. I still don’t need it, but people have been telling me that I should really get one, maintain good credit score in case I ever buy a house. HA! wonder when that’s gonna happen. So, since I couldn’t get one, I had to apply for secure credit with a bank. They use my money as credit. And very good advice about 20%. That’s what they were telling me at the bank is that spending less on your card is actually better. Who knew. I thought more would be better in you pay it off because it shown you follow through and are responsible with the money. Plus they can make more off you. Oh, and I do need to remove a couple of public record thingies from the past. I paid off everything, I have no outstanding bills, but record it still there. Looks like I’l have to start calling Sprint.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s