Wednesday, January 23, 2008

Why pay for credit repair services when you can do it for FREE?!?

When it comes to repairing your credit, you're the best person for the job.

Credit repair scam artists will charge you anywhere from $500 to $1,500 or more upfront, and promise you everything from a new Social Security card to perfect credit.

But these companies can't do anything for you that you can't do for yourself -- for free -- and they might ultimately do more harm than good.

What should you do if you have bad credit? Here are 10 tips that are designed to improve your credit history and raise your credit score:

1. Pull a copy of your credit history. Each credit-reporting bureau is required to give you one copy once a year. You should pull copies from each of the bureaus, since they sometimes collect different data.

2. While you're there, buy a copy of your credit score from Equifax offers a FICO score, also known as a Beacon score, which is from Fair Isaac, the company that created the concept of credit scoring. Most creditors will pull a FICO score, so you should see what they're seeing. Your credit score will give you a snapshot of what your credit information means to your creditors. The FICO score runs from 350 to 850. The higher the number, the better. Your target should be to have a credit score of at least 720.

3. Check your credit history thoroughly. You're looking for errors, misinformation and negative information that might count against you. File a dispute with the three credit-reporting bureaus if you spot any errors. Some credit reports have serious errors in them, so fixing these will boost your score.

4. Understand what kind of debt you're facing. Make a list of everything you owe, the interest rate each debt carries, and the minimum payment due each month. Then, prioritize your debt: mortgage, real estate taxes, credit cards and medical bills should be paid in that order.

5. Negotiate with your creditors for a lower interest rate. Paying less in interest means more of your payment each month goes toward paying down your balance. If you have a good credit score (over 720 is a starting point), you should be able to find other credit cards featuring zero percent to 5 percent in interest for the first year, or for the life of a balance transfer (check out sites like and to compare credit-card offers.) Just be sure you read the fine print: Some credit cards require you to charge on the new account each month or face a stiff fee.

6. Pay down the debt with the highest interest rate first. Pay your mortgage and home equity loan and lines of credit in full each month. Then, make sure you have enough cash to make all of the minimum payments due on your debt each month. Then, throw any spare cash at the debt that carries the highest interest rate first. Once you've paid down that debt, transfer all of the extra cash you're paying each month to the debt with the next-highest interest rate, and so on.

7. Pay everything on time, even if you can make only the minimum payment. The most crucial component of your credit history and credit score is your ability to pay your bills on time each month. Paying on time shows your creditors that you take your debts and obligations seriously. Even one late payment can seriously damage your credit history and credit score, even though it can take a year's worth of on-time payments to start to heal your credit history and raise your credit score. It doesn't seem fair, but that's how the credit industry works.

8. Don't charge more than 25 percent of your maximum available credit limit. If you carry a credit-card balance that is a higher percentage of your available credit limit, your credit score will go down. Why? Because creditors believe if you charge the maximum on your credit cards, it means you can't properly manage your credit. You're better off spreading out your debt between three or four different cards than having it all piled on one card.

9. Don't open and close a lot of accounts. Again, a credit score tells current and future creditors how likely it is that you won't pay back your debts. It assesses how risky a borrower you are today. Every time you apply for a new credit card, that creditor pulls a copy of your credit history from the credit-reporting bureaus. That "inquiry" gets reported on your credit history. Too many inquiries in a short period of time signals that you may be getting low on your available credit and need more cash. Even though you might be interested in getting 10 percent off your first purchase for opening a new account, it looks different to a prospective creditor.

10. Don't share credit (except with a spouse). It's easy to tell someone that you'll "co-sign" a credit card, student loan or a mortgage loan application, especially if it's someone you've known for a long time. But it's also easy to wind up in a situation where that friend or relative stops paying his or her bills (for whatever reason) and your credit will take a big hit. Once you're a co-signer for a loan, you're legally obligated to make those payments -- whether or not you can afford them. So think carefully before you agree to co-sign a loan, and nip the problem of bad credit before it begins.

Article source - Inman News

To get even more valuable advice from Ilyce, visit her Personal Finance and Real Estate Center.

For more info and to order your credit report with FREE credit score please visit

Monday, January 7, 2008

New Threats To Your Credit Score (MSNBC.COM)

Everyone knows that an unpaid creditor can leave a mark on your record for years to come. But now, even your health club or local librarian can lower your score.

Most people know, and can accept, that an unpaid credit card bill can wind up in a collections account that will devastate their credit scores.

But did you know that your credit also could suffer from an unpaid parking ticket, a traffic fine you ignored or a forgotten library book?

A growing number of local and state agencies are using private collection companies to boost their revenues. More than 600 public libraries from Eugene, Ore., to Broome County, N.Y., turn unpaid accounts over to private collectors like Unique Management Services. Cities and courts hire others, including Municipal Services Bureau, to track down overdue parking, traffic and court fines.

Many collection agencies quickly report these overdue accounts to at least one of the three major credit bureaus, and the black marks send consumers' credit scores tumbling. Anyone who's had a spat with a phone company, health club or an insurer turn into a collection knows that this is a pretty big club to waive over the heads of consumers.

Article source:

For more info and to order your credit report with FREE credit score please visit

Tuesday, January 1, 2008

Credit/Debt 2008 New Year's Resolution

Have you been thinking about what you’d like to change for the New Year? Most New Year's resolutions involve improving health or getting rid of a bad habit. Don't forget about improving your financial health and your bad credit habits in the new year. As you resolve to make some changes this year, add one or more of these credit/debt New Year’s resolutions to your list.

Get your free credit report

Since each of the three credit bureaus is required to give you a free credit report each year, there's no reason you shouldn't be checking it. Monitoring your credit report helps you detect identity thefts, ensure creditors are reporting your information correctly, and enables you to take action on credit/debt problems before they get worse.

Clean up your credit report

Don't take for granted that the information contained in your credit report will be accurate. Mistakes happen all the time. It;s up to you to correct those mistakes. Disputing credit report information is free and can often be done online when you check your credit report.

Get out of debt

If you don't have a detailed plan for getting out of debt, you can expect to carry the debt for the rest of your life. Once you make the decision to pay off your debt, you can begin making a plan. Even if your plan spans ten, fifteen years or more, it's better than not having a plan at all.
Make a Get Out of Debt Plan

Repair your credit

Need to fix bad credit? What are you waiting for? The New Year is as good a time as any to start repairing your credit. First, figure out what's causing your bad credit. Then, plan a solution for each of those things. Put your plan into action and you’ll be on your way to better credit.
Do It Yourself Credit Repair

Use credit wisely

Have you been using credit in a way that encourages debt? Changing those spending habits won't be so hard to do. At first, it will take conscious effort on your part. After making good credit decisions for a few weeks, you'll find that good spending habits start to come naturally.
Do's and Don'ts of Using Credit Cards

Improve your credit score

Your credit score influences whether or not you get approved for new credit cards and loans. It also affects the interest rate you pay. Lower credit scores risk denied applications or high interest rates. Improving your credit score improves your ability to get good credit card and loan terms.

Learn more about credit

Many people learn about credit by making mistakes. That wouldn't be such a bad way to learn if credit mistakes weren't so costly. Spend some time this year learning more about credit and understanding the process. You'll be surprised at how information can protect you from costly credit mistakes.

Start an emergency fund

When you have an emergency fund, you don't have to resort to credit or loans when a financial emergency arises. Building an emergency fund can take less time than paying off a credit card used to cover an emergency expense.

Pay less interest

Essentially, interest is the cost of having credit. The money you pay in interest pads your creditors' pockets when it could be padding your own. You can pay less in interest by negotiating lower interest rates or paying your balances off sooner (or both). Transferring balances to a zero percent interest rate balance transfer credit card can also temporarily reduce your interest payments.

Stop paying late fees

Paying late fees is another unnecessary expense that goes to your creditors. Not only do late payments result in late fees, you might also see a spike in your interest rate and a drop in your credit score. These negative results can be avoided by paying your credit card bills on time.

For more info and to order your credit report with FREE credit score please visit

Why pay for credit repair services when you can do it for FREE?!?New Threats To Your Credit Score (MSNBC.COM)Credit/Debt 2008 New Year's Resolution ~ - How's Your Credit? - Blog