Lisa Phillips asked:


Millions of consumers have less than perfect credit and it can be frustrating. Credit has permeated our society and having low credit scores costs you money. Credit scores are the No. 1 determinant in a bank’s decision to approve or decline credit. You may be approved for credit even though your scores are low but you will undoubtedly pay higher interest rates. The following are tips to begin rebuilding your credit:

(1) Authorized Buyer or Piggyback Credit. Becoming an authorized buyer also known as piggyback credit can be an instant way to boost your credit score. If you know someone who has a good credit history and score and is willing to add you to their account, this can immediately raise your credit score. There are companies that provide authorized buyer accounts for a fee. The credit card company will report to your credit files as well as the card holders’. The downfall of becoming an authorized buyer is that if the person ever becomes delinquent, it will also reflect on your credit report. However, if this happens, you can always dispute the account and the credit bureaus will have to remove it because an authorized buyer is not financially responsible for the account.

(2) Retain Old Credit. Maintaining older credit gives you a longer credit history. This is important because credit history constitutes 15% of your overall credit score.

(3) Apply for Easy Credit. There are many companies that do not require strict credit

guidelines. These companies extend credit to consumers with little to no credit history and less than perfect credit. You may have to pay higher interests rates but if you pay on time and keep your balances to less than 30% of your available credit limit, you will build positive credit. Seek credit at your local appliance, furniture, jewelry and tire stores. In addition Radioshack, Fingerhut and Chevron Gas extend easy credit.

(4) Balance Transfer. Do not transfer all your balances to one low interest rate card. You may get many offers for the best credit cards with low and even zero percent interest rates, but if you transfer all of your balances to the one card then you run the risk of increasing your balance to limit ratio. A high balance to limit ratio lowers your credit scores. You should always maintain a balance less than thirty percent of your credit limit in order to have good scores. (Amount Owed is 30% of credit score)

(5) Decrease Your Credit Card Balance. Pay down your credit card and decrease your balance to thirty percent (30%) or less than your credit limit. Your credit score will increase. The great thing about this technique is that it works whether it is a $5000 limit credit card or a $500 limit credit card, your credit scores will instantly improve.

(6) Get a Credit Line Increase.

In the alternative, if you do not have the cash on hand to pay down your credit card account, request a credit line increase but don’t spend it! Many credit card issurers can increase your limit without running a credit report. Make sure you inquire before you request the credit line increase if you do not want to create inquiries.

(7) Get a Bank Loan Secured by a Savings Account. If you have at least $500 cash on hand obtain a savings account secured bank loan. Most banks and credit unions do not run credit reports when you apply for a secured loan. However, they do report these loans to the major credit bureaus, Experian, Equifax and Transunion. Bank loans rank high in credit scoring. But don’t stop at just one secured loan. Once you obtain the first secured loan, take those funds, go to another bank and repeat the process. Now you have two bank loans that will report to the credit bureaus. Make sure these loans are small enough that you can handle making at least two payments per secured loan before the actual due dates. When the banks report to the credit bureaus they will show these payments and you will have established an excellent payment history within (30) days of obtaining the loans.

(8) Get a Secured Credit Card. Secured credit is a good option for those who cannot qualify for regular credit. Not only will you have the benefits of a regular credit card but you will also get an opportunity down the line to convert that secured credit card into a regular one. The same rules apply with a secured card in that you must pay your credit card bill on time and you should keep your balances low. When seeking secured credit make sure the bank reports to all three major credit card agencies, Experian, Equifax and Transunion.

(9) Limit Hard inquiries. Hard inquiries can take up to five (5) points off your credit score. Applying for new credit will lower your credit score. Keep inquiries at a minimum. Additionally, any company that pulls your credit report without your authorization is in violation of the Fair Credit Reporting Act which allows only authorized inquiries to appear on your credit report. According to FCRA rules you are entitled to $1,000 for each unauthorized hard inquiry. (New Credit Applications is 10% of your credit score)

(10) Know the Information reported by Credit Card Companies. Make sure your credit card companies report your limit and balance. Some may only report your balance and not your credit limit. Lenders who engage in this practice may actually be causing your credit score to be lower. The scoring system will plug in your highest balance as your credit limit and if you are currently at a high balance this can be detrimental to your scores. Capital One was notorious for this practice; however, in August 2007 they changed their policy and will be reporting credit limits. This means many consumers who hold a Capital One credit card may see a boost in their credit scores.

(11) Pay Obligations by the Due Date. Pay your obligations by the due date. A late or missed payment can drop a good credit score by 100 points or more. It may not make sense but if you already have negative entries on your credit report adding more will not hurt you as much as if you don’t have any negative entries. Regardless, paying on time can raise your credit score. (Payment History is 35% of your credit score)

(12) Zero Balances may Hurt Your Credit Score. Strange but true. If you have many credit card accounts with zero balances your credit score may be lower. Credit scores can be raised by maintaining a small balance (at least $10) on your credit cards.

(13) Keep Balances to Thirty Percent (30%) of Credit Limit. Do not use over thirty percent (30%) of your available credit. Keep those balances low and your credit scores will rise. Definitely do not go over your credit limit. This hurts your credit score tremendously.

(14) Re-Aging to Improve Your Credit Scores. Re-Aging is a technique used by creditors to get rid of your past-due account. You are no longer delinquent and your account status changes to “current” which increases your credit score. Request Re-Aging from your creditors. Re-Aging is a quick and free method to raise your credit scores, it gives you a fresh start. Federal guidelines dictate how creditors can re-age accounts but essentially here is how it works:

• The borrower has to demonstrate renewed willingness and ability to pay the account on time.

• The account should be at least nine (9) months old.

• The borrower should have made at least three consecutive monthly minimum payments.

CreditScoreAide .com asked:


A credit score is the only optimum rundown or breakdown of a consumer’s credit worthiness. Popularly known as a FICO score, in reference to Fair Isaac Corporation, the company is where the system originated and currently being made the basis in calculating the credit worthiness of a consumer with a credit score number.

A credit score is a condensation of all your credit report information by using a FICO formula designed to present to the lender a quick, precise foresight of the risk they may gamble or take in providing you a loan or credit. Most lenders have affirmed their belief to the credit score’s significance in simplifying the financing process and give more chances for consumers to obtain loans.

A FICO score may range between 300 up to 900. Obtaining a high score could mean better terms to get for your loan. Most credit scores you can get online but with corresponding fees. Lenders approve your loan and what interest rate to give you on the basis of your FICO score.

Credit companies have kept credit score information from the consumers until recently, starting July 1, California state law began requiring all credit bureaus to provide credit scores for consumers who request them.

The three major players like Equifax, Experian and TransUnion, are now into selling credit scores with credit reports to consumers for a fee.

E-Loan, a company who started a crusade for free credit scores have provided them for free last year through the net but without a credit report. Led by its president, Chris Lansen, E-Loan launched a campaign to give people free credit scores without a fee.

In the beginning, E-Loan was supplying free credit scores for about 42 days but was prevented by Equifax who stopped giving E-Loan information on consumer scores. It was learned, it was due to a FICO request, the company from which the credit bureaus scoring formula originated. The FICO score is the recognized yardstick of credit scores. E-Loan uses a different formula from a competitor, Neuristics. They call it CreditXpert Credit Score. Therefore, when E-Loan was forestalled in giving free credit scores, E-Loan turned to lobby their campaign to the State Legislature to compel the credit bureaus to supply them credit scores. Similar bills are expected to be filed this year at the US House and Senate. It is to the belief of E-Loan president and the company, each consumer will benefit and be able to manage better their credit, and debts like a pro if they are made aware of their credit scores together with the rates of interest that goes with it and the expected fees to pay. Knowledge of your credit score can give you leverage to negotiate better terms for your intended loan.

Therefore, a good advice will be, until a free credit score is provided to the consumer, it is wise to shop initially from the three major credit bureaus for their corresponding fees required to purchase a credit score for comparison.

Garrett C asked:


I am trying to start a credit repair company but I have not found a company to go through to pull credit. All the companies seem to only work with mortgage companies. HELP!

Cornie Herring asked:


Have you ever wonder why your online application for credit can be approved in 60 seconds? Or get pre-qualified auto loan for a car without asking you how much is your income? Or why your interest rates on loans are different from the interest rates of your friends or neighbors?

Your credit scoring is the factor that affect all the above. It is your responsibility to main a good credit score. You will need to use it to get you a best available rate when come to apply for credit.

What is Credit Score?

Most of time credit score is refer as FICO score (Fair Isaac Corporation), it is a number based on the information in your credit file that shows how likely you are to pay a loan back on time, the higher your score, the less risky you are. You credit score is derived from three major credit bureaus: Exprian, Equifax and TransUnion. These 3 major credit bureaus will compile your credit report based on the information provided by the companies that gave your credit in the past. Based on the information such as your payment history, the length of your credit history and the type of credit your have and the amounts owed, the credit bureaus will generate your credit report. And based on your credit report, a number or scores will be assigned to you; this number will be range from 300 to 850. This magic number is your credit score, the higher the number the better you are.

When Your Credit Score Count?

Your credit score will play an important part when comes to applying loans or other credits, it may save you a significant of interest if you are have good credit score. When you apply for mortgage, car loan, business loan or credit card, the lender or credit company will assess how risky you are as a potential borrower, the higher your score, the less risk you pose to the lender and the more likely you will get a better interest rate for application.

You will be offered at a relatively low rate if your credit score is above 700 and if your credit score is above 760, you will get the best available rates because you are the lowest risk borrower at this high of credit score. You loan will be approved with high loan rates if your credit score is below 600, and if your credit score is really bad, you may be not be able to borrow at all.

Maintain High Credit Score

Now you know how important your credit score is and when it becomes important and you can use it as a tool to save cash. Hence, it is important for you to maintain your credit score at high level. Things that you can do to increase your credit score include:



Pay your bills on time

Keep balances low on credit cards

Don’t open a number of new credit cards that you don’t need

Have credit cards - but manage them responsibly



In Summary

Credit score is not just a number, it is a tool that you can control and use to save cash. It will become important whenever you need credits and it is an important factor to be considered by any financial organization before they approve your credit application. Hence, keep your credit score all time high.