5 Steps to a Credit Makeover

See how much money you can save just by following these tips for raising your credit score.

Payment History

• Pay your bills on time to avoid late payments and collections that can have a major negative impact on your FICO score.
• If you have missed payments, get current and stay current.Be aware that paying off a collection account will not automatically remove it from your credit report. Consider hiring a professional as these can stay on your report for seven years.
• If you are having trouble making ends meet, contact your creditors or see a legitimate credit repair advisor.

Credit Cards

• Keep balances low in relation to credit limits on credit cards and other "revolving credit".
• Pay off debt rather than moving it around. The most effective way to improve your credit score in this area is by improving your Credit Utilization Ratio.
• Don't close unused credit cards, as a short-term strategy to raise your score. Make small purchases and pay off the balance.
• Don't open a number of new credit cards that you don't need, just to increase your available credit. This approach could backfire and actually lower your credit score.

Credit History

• If you have been managing credit for a short time, don't open a lot of new accounts too rapidly.
• New accounts will lower your average account age, which will have a larger effect on your score than if you don't have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.

New Credit

• Do your rate shopping for a given loan within a focused period of time. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
  Re-establish your credit history if you have had problems. Opening new accounts responsibly and paying them off on time will raise your credit score in the long term.
• Note that it's OK to request and check your own credit report. This won't affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.

Types of Credit

• Apply for and open new credit accounts only as needed. Don't open accounts just to have a better credit mix - it probably won't raise your credit score.
  Having credit cards and installment loans (and making timely payments) will raise your credit score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
• Note that closing an account doesn't make it go away. A closed account will still show up on your credit report, and may be considered by the score.

If you have any questions about how to get the highest credit score possible, call me at (702) 275-5001 for a free consultation or visit www.nationalcreditrepairalliance.com

To your good credit,

Mike