Your credit report shows your ability to manage finances responsibly and repay loans on time. For most creditors your three digit FICO score is the best predictor of your future bill paying performance. If you score is far from perfect and you are trying to clean up your credit report-you are not alone. More than 35 million Americans have less than perfect credit. Some of them have given up fixing credit. Others have embarked on a long journey of financial discipline and careful budget planning. There is a small percentage of people that are using a different approach to credit repair. Knowledge about the inner workings of the credit system and the various credit tricks lies in the center of this approach. Here are 3 simple tips that will help you understand how the approach works.
1 Work on the most damaging accounts first.
Your three digit FICO score breaks down into 5 different factors. Each of these factors has a different impact on your overall score. Your payment history ( paying your bills consistently on time) accounts for more than 35 % of your FICO score. In other words, taking care of any recent late payments should bring an immediate increase in your credit score. Balance/credit limit ratio is the other major factor. It takes into consideration the ratio on each individual credit card as well as your total accumulative balance. Bringing your balance down or at least redistributing the balance from maxed out cards to cards you haven't used will have a positive effect on your credit score. In a nutshell-it's vital than you focus on the items in your credit report that have the most detrimental effect on you current score.
2 "Deleted" is way better than "paid off".
There is no need to pay off all off your negative accounts even if you have the extra cash. In many cases it is better to leave old collection accounts untouched, simply because paying them off will update the accounts as "current". The adverse account (albeit paid) will now have greater impact on your overall credit score. The key to fast credit repair is not simply paying off negative accounts, but DELETING them. In order to delete an adverse account, you have to negotiate with the debt collector and agree to pay ONLY if they remove the item from your report. If the collection agent refuses to do the favor, keep on calling until you find someone who is willing to cooperate.
3 Increase credit line, decrease amount owed.
That is one of the simple rules for fast credit repair. Since balance to credit ratio is the second most important factor in your credit score, bringing the credit card balance to the healthy 30% will increase your FICO. Another strategy here is to obtain a new credit card that will increase your overall credit line.
There are different ways to clean up your credit report. Some require considerable financial discipline and effort. Others require one simple factor-credit knowledge. The more you know about the credit system and the various loopholes in it, the better your chances to find a shortcut to a better credit score.
Author: Irena Bocheva
http://fix-credit-score.info/
Do you really think fixing credit takes a long time? Click on the link above and learn about the fastest ways to raise your credit score
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