How to improve your credit score
For some people, the need to purchase a car immediately trumps all other considerations (such as needing a new car for work). But for others, the purchase decision can be put off for a bit. If that’s the case for you and you have a low credit score, you may want to put off buying that car while you work to improve your credit score.
Fortunately, you don’t have to live with a bad credit score. By carefully managing your finances and doing all you can to live within your income, you can rebuild your credit history and improve your credit rating as a result. In addition, you may also be able to positively impact your credit score on a more immediate basis by using a legitimate and legal Credit Repair process.
You may improve your credit scores with legal credit repair
Legal credit repair consists of using legal and appropriate strategies to remove questionable items on your credit report or to improve your overall credit rating. There are a number of different methods that legitimate credit repair organizations use to accomplish this. Some of the more common and effective methods are:
- Credit Disputation
You have the right, under the Fair Credit and Reporting Act (FCRA) to contact the credit bureaus to dispute items on your credit reports. You can dispute any and all items that you feel classify as unverifiable, inaccurate, or misleading. The FCRA specifically states that only items that are unverifiable, inaccurate, or misleading should be disputed. Items that are clearly ones that belong to you need to remain on your reports. It is illegal to dispute items on your credit reports that are clearly and verifiably yours.
- Goodwill Creditor Negotiation
As part of the credit repair process, you can attempt to negotiate directly with creditors and ask them to remove questionable items from your credit reports. This is a viable and often effective method of credit repair for accounts that are not significantly “late pay”.
Piggybacking is a practice long used by parents to help their children improve their credit (or establish credit). For many years it legitimately helped good consumers to establish a good credit foundation. Unfortunately, in recent years some unscrupulous credit repair companies began using Piggybacking inappropriately resulting in a revamp of the rules for Piggybacking since 2008. While Piggybacking can still be used in credit repair, it is more difficult to do.
- Loan Consolidation
Loan consolidation is the process of taking out an equity loan (typically on a home) at a lower interest rate and paying off the debts that are owed at higher interest rates (as well as getting all accounts current). This process can have a rapid effect on a credit report and the associated credit scores but can lead to greater problems if the person(s) taking out the loan are not disciplined enough to keep from adding more to their debt going forward.
- Early Pay or Pre-statement Pay Strategy
This is a strategy where you pay off a bill before the statement is issued by the crediting institution. When you pre-pay before the statement is issued, it will show that you have a lower balance due to the pre-pay.
If you have bad credit scores, it’s important to note that some initial headway on credit repair can often be accomplished in 60 to 90 days… and sometimes faster. Individual results vary and some people can do very little to repair their credit. But, the truth is that if you are willing to work with a legitimate firm and do the things you need to do, you can probably improve your credit score and improve your chances of getting a better loan and interest rate (and maybe a better job as well).
To find out about how credit repair might work for you, click the link below:
Just because you have a great score doesn’t mean you’ll qualify
It’s important to note that just because you have a relatively high credit score doesn’t mean that you’ll automatically qualify for a loan. In this post-lending-crisis world, lenders are much more cautious than they used to be. Lenders check to see if you’ve ever had an auto loan before. If not, you may end up paying a higher interest rate to borrow money for a car. In addition, if you have a relatively high debt load, even if you’re making all your payments, you could get rejected or have to pay a higher rate.
The best way to improve your scores is to pay back the money you owe
The truth is, however, that the best way to improve your credit scores is to pay back what you owe. And if you can do it, pay it off before you buy a new car. If you can, get your credit card balances transferred to one, low-interest credit card. And, don’t add to the balance; pay it off as soon as possible. If you have equity in your home, you may want to consider a home equity loan to pay off all the other debts you can (especially the high interest ones). Once you’ve paid them off, close them so you aren’t tempted to add to your debt.