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Ways to repair your credit score

Posted on July 17, 2012 by Ray Williams (NMLS #216267).

There are a lot of us that just don’t understand how the credit score works, we are still in the dark about what makes our credit scores go up and what makes them go down.

Here are a few tips to help repair your credit.

First you need to know your credit scores.  And understand the credit utilization ratio- the total amount of revolving credit someone uses in a month compared with amount of available credit the person has.  This is a major factor in calculating a score.

  1.     Pay bills BEFORE the statement due date. – Typically the balance of your last statement date is the balance that will be reported to the credit bureaus, so if you pay most of your bill before the statement date, you can lower your utilization rate.  And that can help higher your credit score.
  2. Make multiple payments- if you use your credit card throughout the week for everyday expenses then pay each week or every other, or when you get paid, instead of one payment at end of month.  The lower your balance on your credit report, the better!
  3. Ask for a “Goodwill” deletion- Most creditors if you are always paying on time and you have a late reported, most of the time they will delete it on your reporting as a “goodwill” to a good client.  Just taking off those late payments will improve your score!
  4. Pay for removal- If you have an account that has gone into collection, sometimes collectors will agree to remove the debt from your credit report if you agree to pay it off.  Now the most important thing with this is that you ask for it in writing!  And you get the letter on company letterhead that spells out that the collection agency will remove the debt from ALL THREE major credit reporting bureaus.  Get this before you pay anything!
  5. Protect yourself in a short sale- If you are ever in need of doing a short sale on your home, protect yourself by asking and arranging with the lender not to report a balanced owed!  Meaning a lot of times if the amount on your home that is owed is $100,000 and you are agreeing to short sale it for $70,000, the bank can report home loan settled for less than full amount and could note “balanced owed” on the credit reports even though the obligation has been finalized and no additional money is owed.  By having them not note this will help alleviate the negative score impact.

There are many tricks and tips out there to help boost your credit.  For more tips and ideas make sure to check out MSN Money, they usually have some great articles.

For any questions please call or email me, I am not a financial advisor nor am I a credit repair service but I have been in the business a long time to see what works and what doesn’t and I am always here to share any advice.

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Cheers~

Ray Williams

Branch Manager

Summit Home Mortgage

rwilliams@summit-mortgage.com

303-779-0591 ext. 101

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