Hidden Credit Repair Secrets

by Mark Clayborne

  This is situation is quite easy to reverse as all you need to do is get a credit card or two and maybe a small loan or two and start paying them off on time and in full.

  This will establish a favorable credit history for you and allow you to get bigger loans and also get those loans at better interest rates.

  Even if you have had credit in the past but haven't had any recent history, this can also have a negative impact on your credit score, as the credit bureaus like to see that you have recent good financial management as a sign that you currently aren't a high risk.

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  Once again this can be addressed in the same manner as someone who has never had any credit by getting some smaller amounts and making sure you pay on time.

  It can be better to keep accounts open even if you haven't been using them rather than closing them when you pay them off.

  The Type of Credit You Have

  To a lesser extent than your credit history, the amount of your credit and the time you have had credit, your credit score will be affected by the type of credit that you have.

  You can estimate that this will account for approximately 10 percent of your credit score on average.

  As with most other areas of credit repair this is also relatively easy to resolve by simply getting more of a mix with your borrowings.

  Lending institutions like to see that you are capable of managing various types of debts as this will give them the confidence that you will be able to handle the repayments of their money.

  If you have a few different types of loans and also pay bills on a regular basis then that will represent a fairly rounded portfolio and should show that you are competent with the management of your responsibilities.

  Look at the types of credit that you currently have and consider getting other types of credit in the form of credit cards, small hire purchase loans or any other small loans that differ from those that you are holding at present.

  This is not to encourage you to increase your debt and place additional strain on your finances but you can substitute part of one form of credit with that of another.

  You will need to look for a suitable balance when doing this as even though the lending companies like to see that you can handle many different forms of debt they won't like to see that you have too much debt or too many debts.

  Think along the lines of the lender and borrow according to what you believe they would like to see.

  In all accounts make sure that you make all your repayments on time and when you are managing more than one debt you really do need a budget to make it easier to manage and remember the payment dates.

  Boosting Your Credit Score

  Because there are many different factors that are used to determine the way your credit score is calculated, the way that you approach the situation will determine how fast you can boost your rating.

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  As it is possible to have some idea of the areas that are affecting your credit score and also the impact that these areas have on the overall rating you can create a plan that gives you the best results in the least time.

  By approaching your credit repair in such a manner this will make each step of your plan easier to accomplish as improving your ability to get smaller value loans will allow you to build upon the 'new' history you are creating and give lenders the confidence to trust you as a safe client.

  This will allow you to get better interest rates and the lower repayments due to this will ensure that you can manage them and not miss any payments, thereby improving your credit score even more.

  While you should start your plan with this approach to get the momentum going to improve your score you will also need to remember that there are several areas that will affect your score and they all need to be addressed at some stage if you are to get the highest score possible.

  You will need to adjust your plan and budget as you progress and more often than not most people who follow a specific plan find that they start to achieve their goals sooner than initially expected.

  Repairing your credit score isn't quite as hard as most people assume provided you make the right moves and ensure than you don't have any hiccups along the way where you miss payments or make your payments late.

  If you are serious about repairing your credit rating then you need to understand that there shouldn't be any room for error, as it won't look good in the eyes of the lenders if you are still unable to meet your commitments.

  Outstanding Bills

  Paying your outstanding bills and maintaining a good payment record of your bills is the obvious first step towards repairing your credit rating and improving your credit score.

  This proves to lenders that you are a responsible person who takes your monthly commitments seriously.

  It helps to build a good financial history and that will give lenders the confidence they need to expect that their accounts to you will be paid on time too.

  As paying bills on time has such a huge impact on your credit score it is an area that you really need to concentrate on and make sure you don't miss any payments no matter how small they might be.

  This information should please anyone who is attempting to repair they credit score because it is so simple to boost your score simply by paying your bills.

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  Unfortunately most people don't realize how easy it is to make positive moves towards a better credit score.

  The bottom line is; Lenders just want their debt repaid and the interest they charge on that debt to be paid on time.

  They will lend money to anyone if they can be assured they will get repaid and the best place they can get this assurance is from the credit bureaus and your credit score.

  If you can show you are a good payer of your bills then you stand a very good chance of getting the money you are trying to borrow - it's as simple as that.

  Not only will paying your bills on time improve your credit score but you will also be able to take advantage of discounts offered for payment by due date or alternatively not have to pay penalties for late payments.

  These savings can go towards making your bill payments and this is one of the reasons why budgeting is so important, as it will help you to know when your debts are due and reduce the chances of you missing payment dates.

  If your credit history is one of missed bill payments it can take some time of making your payments without problems to before it is reflected in your credit score.

  Too Many Credit Lines

  Lenders don't want to see that you have too many lines of credit as this can be a sign that your finances are overextended and you might not be able to make the repayments on any money that you borrow from them.

  Even when you can prove that you have been making all of your current repayments for loans and bill payments it will be difficult to get additional credit as that particular source of credit might be the one that changes your ability to competently manage your debt.

  Every time you borrow more money your ability to make your payments on time diminishes and lenders will take into account the amount of money you are requesting from them in addition to your current debt and they will usually place more importance on your ability to pay them than your other debts.

  Not only will they look at your current financial position and your ability to pay your current debts but they will also take into account your ability to handle unforeseen problems that might occur.

  Sickness and other problems will place additional loads on finances in the form of an inability to generate the income required to make the payments and also the added cost of healthcare.

  In addition to this it has been shown by the research that is available to the lending institutions that the additional stress that is placed on people who have excess or high

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  levels of debt c
an cause divorce, stress related illnesses and other problems that will have an impact on the ability to cover the repayments on debt.

  Lenders will always look at the worst-case scenario as they need to protect their investment and if they have any doubt about your ability to pay them you won't get the credit.

  The credit bureaus also understand these facts and they will re-rate your credit score accordingly to help lenders make better decisions.

  Obviously then, you will want to be reducing the number of credit lines you have to a more reasonable number to help improve your credit score.

  Identity Theft

  Many people who have had a good record of debt and bill repayment are surprised to find that their credit score is lower than it should be.

  This can occur when you have been a victim of identity theft or there has been an error on your credit report.

  Identity theft is more widespread that many people assume and it can affect you without you ever knowing, until of course you make an application for credit and get declined.

  Identity theft is where a criminal will assume your identity by stealing your information and getting access to your accounts.

  They will use this information to drum up debt leaving your financial record in tatters.

  Sometimes they will use your information more discretely by removing small amounts of money from your accounts over a period of time.

  This can happen when they get access to your PIN numbers of credit cards or bank accounts.

  They can also use your information to get new credit cards and use them up to the credit limit before attacking the next unsuspecting victim.

  When this happens you are left with the debt and the poor credit score.

  You should always check all your accounts on a regular basis and look for any suspicious activity. If you notice anything that you are unsure of contact your bank immediately and get them to investigate.

  In addition to checking your accounts you should also check your credit report regularly to see whether there is anything on it that you believe shouldn't be there.

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  There will be information on your credit report of new accounts if they have been created in your name and you will be able to act on these immediately if you see them on your records.

  If there is any suspicious activity you should report it to the police immediately and get a statement from them that you can then send to your bank or the lending institution that shows on your report. Notify the credit bureaus and get them to attach the police report to your records and make sure you close the accounts that have been attacked.

  Identity Theft Safety

  It is important that you keep all your information safe to reduce the chances of being a victim of identity theft.

  To do this you will need to practice safe banking, business and computer practices.

  You should always keep all your PIN numbers and passwords safe and use numbers and passwords that are not easy to guess.

  Never use birth dates, phone numbers or address numbers as your passwords or in your PIN numbers.

  At any time you need to use your PIN number make sure that you have it covered from other people seeing it and never give anyone your PIN or your passwords for any of your financial information no matter how much you might trust them.

  Never write down your PIN numbers or passwords as this will increase the chances of the information falling into the wrong hands.

  When you do business of any kind only do it with people that you trust

  Even when you get any form of information from the banks or for credit cards, make sure you thoroughly destroy the information either by burning or shredding it and if you put it out with the rubbish make sure that people who go through your rubbish can't piece together the information to steal your identity. And yes these thieves do go through people's rubbish to get the information they need, as this is often one of the easiest ways to get what they need.

  Pre-approved credit can be a real problem as thieves can get the forms and fill them out to their requirements and steal your identity quite easily.

  You can never be too cautious when protecting your identity and the time and effort it takes to be safe is certainly a lot less than the time it takes to clear up the problems that it can create later on down the line.

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  More Identity Theft Information

  A lot of identity theft occurs on the computer where thieves get access to your information online.

  Due to this you need to be particularly careful to protect your information when using a computer to access your online banking information and also when using credit cards to buy products online.

  Many of the viruses that are created allow people to gain access to information on your computer so it is always wise to have up to date anti virus software installed on any computer than you are using.

  When you are paying for products or services online make sure that you are only doing this with trusted companies who have the necessary security measures in place to reduce the chance of fraud. They should have encrypted payment facilities and a good privacy policy at the very least.

  Email accounts can be accessed by outsiders so always ensure that there is no private financial information stored in your email accounts and never assume that an email that appears to be coming from your bank is a legitimate email as it is a popular scam to appear as a bank to get your personal information to access your 'real' bank accounts.

  Never give your credit card details over the phone unless you are 100% sure that it is safe to do so with a trusted company.

  You can always check with the Better Business Bureau to see whether companies are legitimate to deal with and your money and information will remain safe.

  You should also check your credit card statements as you get them to see if there is any unusual activity as fraudsters are often able to get information and make charges without most people ever realizing.

  If there is a problem contact your bank immediately and they will usually reverse the charges and issue you with another card that has different numbers and login information.

  Check Your Score Regularly

  The only way that you are going to make sure that there aren't any irregularities with your credit score is by checking it on a regular basis.

  This is a good practice to adopt because you can deal with any problems in a timely manner and not let them come to the surface when you are in need of urgent credit.

  At a minimum you should check annually and unfortunately most people don't do this.

  You should always check your credit score at all the main credit bureaus as some will have different information than others.

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  If there is anything that shouldn't be on your report then let them know immediately and find out where the source of the problem is before it becomes a bigger concern.

  Usually it will only be a mistake that the credit bureau has made and that is why it is essential that you check with all the major credit bureaus and not just one. It could be the one that you didn't check that had the error that will stop you from getting the credit you need when required.

  If the 'error' turns out to be a problem with identity theft then you will need to contact all the credit bureaus and get help from their fraud department.

  They will place an alert on your file that will let anyone who is seeking information of your credit score know that you have been a victim of fraud.

  The alert will also tell you when a lender is looking at your file and if this is happening when you aren't requiring it for any financial transactions then it might be because the identity thief is trying to get money in your name.

  Alerts usually last for between 90 and 180 days but this period can be extended if you ask for an extension of the time.

  When a lender sees that the person trying to g
et the credit isn't you they will deny the application and often alert the authorities to the person trying to get the money.

  Steps You Can Take Against Identity Theft

  In certain circumstances you can ask for a freeze to be placed on your credit score when there has been an identity theft attack that will stop anyone else accessing the information apart from yourself and your current creditors who have already had access to the information.

  This will stop any lenders having access to your account to set up new loans for the identity thieves and without the ability to steal money from you they move on to their next victim.

  There is a dedicated identity theft hotline that is set up at the FTC (Federal Trade Commission) and you should contact them immediately if you find you have been a victim of identity theft.

  They will help you with information on how to protect your identity and how to improve your credit score.

  The police should be notified as they might be able to catch the culprits from the information that you have on your file with the paper trail of their activities and the people the thieves contacted in their attempts to get money.