101 powerful tips to boost and repair your credit

boost and repair your credit

Boost and repair your credit

Contents

Tip #1: Understand where credit scores come from

If you are going to improve your credit score, then logic has it that you must understand what your credit score is and how it works.  Without this information, you won’t be able to very effectively improve your score because you won’t understand how the things you do in daily life affect your score.   

If you don’t understand how your credit score works, you will also be at the mercy of any company that tries to tell you how you can improve your score – on their terms and at their price. 

In general, your credit score is a number that lets lenders know how much of a credit risk you are.  The credit score is a number, usually between 300 and 850, that lets lenders know how well you are paying off your debts and how much of a credit risk you are.   

Some lenders will work with you if you have credit scores in the 600s, while others offer their best rates only to those creditors with very high scores indeed. Some lenders will look at your entire credit report while others will accept or reject your loan application based solely on your credit score. 

The credit score is based on your credit report, which contains a history of your past debts and repayments. Credit bureaus use computers and mathematical calculations to arrive at a credit score from the information contained in your credit report.   

Once a file is begun on you (i.e. once you open a bank account or have bills to pay) then information about you is stored on the record.  If you are late paying a bill, the clients call the credit bureaus and note this.  Any unpaid bills, overdue bills or other problems with credit count as “dings” on your credit report and affect your score.   

Information such as what type of debt you have, how much debt you have, how regularly you pay your bills on time, and your credit accounts are all information that is used to calculate your credit score.   

Your age, sex, and income do not count towards your credit score.  The actual formula used by credit bureaus to calculate credit scores is a well-kept secret, but it is known that recent account activity, debts, length of credit, unpaid accounts, and types of credit are among the things that count the most in tabulating credit scores from a credit report. 

Tip #2: Keep the contact information for credit bureaus handy

The three major credit bureaus are important to contact if you are going to be repairing your credit score.  The major three credit agencies can help you by sending you your credit report.  If you find an error on your credit report, these are also the companies you must contact in order to correct the problem.  You can easily contact these organizations by mail, telephone, or through the Internet: 

Equifax Credit Information Services, Inc 

Address: P.O. Box 740256

             Atlanta, GA 30374 

Telephone: 1_888_349_ 5191

Website: www.equifax.com  

TransUnion LLC Consumer Disclosure Center  

Address: P.O. Box 1000  

             Chester, PA 19022 

Telephone: 1_800_833_6938 

Website: www.tuc.com  

Experian National Consumer Assistance Center  

Address: PO Box 4500  

             Allen, TX 75013  

Telephone: 1_888_397_3742 

Website: www.experian.com  

You may want to note this information wherever most of your financial information is kept so that you can easily contact the bureaus whenever you need to. 

Tip #3: Develop an action plan for dealing with your credit score

Once you have your credit report and your credit score, you will be able to tell where you stand and where many of your problems lie.  If you have a poor score, try to see in your credit report what could be causing the problem: 

-Do you have too much debt?   

-Too many unpaid bills?   

-Have you recently faced a major financial upset such as a bankruptcy?   

-Have you simply not had credit long enough to establish good credit? 

-Have you defaulted on a loan, failed to pay taxes, or recently been reported to a collection agency? 

When developing your action plan, know where most of your credit score is coming from: 

  1. Your credit history (accounts for more than a third of your credit score in some cases).  Whether or not you have been a good credit risk in the past is considered the best indicator of how you will react to debt in the future.  For this reason, late payment, loan defaults, unpaid taxes, bankruptcies, and other unmet debt responsibilities will count against you the most.  You can’t do much about your financial past now, but starting to pay your bills on time – starting today – can help boost your credit score in the future. 
  • Your current debts (accounts for approximately a third of your credit score in some cases).  If you have lots of current debt, it may indicate that you are stretching yourself financially thin and so will have trouble paying back debts in the future.  If you have a lot of money owing right now – and especially if you have borrowed a great deal recently – this fact will bring down your credit score.  You an boost your credit score by paying down your debts as far as you can. 
  • How long you have had credit (accounts for up to 15% of your credit score in some cases).  If you have not had credit accounts for very long, you may not have enough of a history to let lenders know whether you make a good credit risk.  Not having had credit for a long time can affect your credit score.  You can counter this by keeping your accounts open rather than closing them off as you pay them off. 
  • The types of credit you have (accounts for about one tenth of your credit score, in most cases).  Lenders like to see a mix of financial responsibilities that you handle well.  Having bills that you pay as well as one or two types of loans can actually improve your credit score.  Having at least one credit card that you manage well can also help your credit score. 

As you can see, it is possible to only estimate how much a specific area of your credit report affects your credit score. Nevertheless, keeping these five areas in mind and making sure that each is addressed in your personalized plan will go a long way in making sure that your personalized credit repair plan is comprehensive enough to boost your credit effectively. 

Tip # 4: Pay your bills on time

One of the best ways to improve your credit score is simply to pay your bills on time.  This is absurdly simple but it works very well, because nothing shows lenders that you take debts seriously as much as a history of paying promptly.  Every lender wants to be paid in full and on time.   

If you pay all your bills on time then the odds are good that you will make the payments on a new debt on time, too, and that is certainly something every lender wants to see. Experts think that up to 35% of your credit score is based on your paying of bills on time, so this simple step is one of the easiest ways to boost your credit score. 

Tip #5: Avoid excessive credit

If you have many lines of credit or several huge debts, you make a worse credit risk because you are close to “overextending your credit.”  This simply means that you may be taking on more credit than you can comfortably pay off.  Even if you are making payments regularly now on existing bills, lenders know that you will have a harder time paying off your bills if your debt load grows too much.   

The higher your debts the greater your monthly debt payments and so the higher the risk that you will eventually be able to repay your debts.  Plus, statistical studies have shown that those with high debt loads have the hardest time financially when faced with a crisis such as a divorce, unemployment, or sudden illness.   

Lenders (and credit bureaus who calculate your credit score) know that the more debt you have the greater problems you will have in case you do run into a life crisis.   

In order to have a great credit score, avoid taking out excessive credit.  You should stick to one or two credit cards and one or two other major debts (car loan, mortgage) in order to have the best credit rating.  Do not apply for every new credit line or credit card “just in case.”  Borrow only when you need it and make sure to make payments on your debts on time.   

You should also know that taking out lots of new credit accounts in a relatively short period of time will cause your credit score to nosedive because it will look as though you are being financially irresponsible. 

Tip #6: Pay Down Your Debts

If you have a lot of debt, your credit score will suffer.  Paying down your debts to a minimum will help elevate your credit score.  For example, if you have a $1000 limit on your credit card and you regularly carry a balance of $900, you will be a less attractive credit risk to lenders than someone who has the same credit card but carries a smaller balance of $100 or so.  If you are serious about improving your credit score, then start with the largest debt you have and start paying it down so that you are using a less large percentage of your credit total.  

Tip #7: Have a range of credit types

The types of credit you have are a factor in calculating your credit score.  In general, lenders like to see that you are able to handle a range of credit types well.  Having some form of personal credit – such as credit cards – and some larger types of credit – such as a mortgage or auto loan – and paying them off regularly is better than having only one type of credit.   

Tip #8: Look out for identity theft

Many people who are careful about paying bills on time and having minimal debts are shocked each year to find that they have low credit scores.  In many cases, this happens as a result of identity theft.  Identity theft is a type of crime in which people take your personal information and steal that information to pose as you in order to get access to your accounts or identity.  

To prevent identity theft, always check your account statements carefully each month.  Report any suspicious activity or any charges you don’t recognize at once.  Also check your credit report regularly and immediately investigate any new credit accounts you do not recognize – this is the best way of detecting and acting on identity theft.  

If you have been the victim of identity theft, report to the police at once and get a police statement.  Send copies of this to your bank and credit bureaus.  Better yet, get the credit bureaus to attach the report to your credit report, if you can.  Close all your accounts and reopen new ones.  You should not have to pay for someone else’s illegal activity. 

Tip #9: Practice safe banking, safe computing, and safe business practices

To stay safe from identity theft, always follow safe banking and financial practices: 

  1. Keep account numbers and PIN numbers safe.  Cover your account and PIN numbers when using debit at the store and refuse to give your PIN number to anyone. Avoid writing down your PIN and account numbers – you never know when this information could fall into the wrong hands. 
  • Only do business with businesses you trust. 

3)If you get applications for credit cards in the mail that are “pre-approved” rip up the applications and enclosed letters before discarding them.  No, this is not paranoid. Identity thieves sometimes go through garbage in order to find these forms so that they can fill them out and steal your identity. 

  • If you use a computer, install good firewall and antivirus protection system and update it religiously.  Better yet, take a course in safe computing at your local college or community center.  You will learn many good tips for keeping all your information safe while you are online. 
  • Never buy anything online from a company you do not trust of from a company that does not have encryption technology and a good privacy policy. 
  • Even with all computer precautions, avoid providing private information through email or your computer.  Be especially cautious if you get an email from your bank asking you to verify your information by clicking on a link – this is a popular scam that comes not from your bank but from criminals posing as your bank.  Ignore the email and phone your bank about the message.  
  • Be wary of unsolicited emails, phone calls, or mail advertisements.  Most are from legitimate companies but there are companies who promise you a credit card over the telephone only to charge your existing credit card without sending you anything.   
  • Be wary of offers that seem too good to be true.  If you get an offer for a ten million dollar check – for which you need to put down $5000 as a “sign if good faith”…if you get an offer for a free state-of-the art computer – if only you provide your account information… take a deep breath and consider before sending in your money and your information.   

Offers that are too good to be true always are.  Scam artists often rely on your belief in others and your trust to make money.  They depend on the fact that you will be so excited about a product or service that you will throw good judgment out the window.  Prove them wrong.   

  • Read the fine print.  Some services or companies will have tiny print in their contract or agreement that allows them to charge you extra hidden fees or that allows them to retract certain offers.  If you get an offer through email or the mail, make it a habit to read the fine print.  
  1. Be alert for a sudden disruption in your mail service.  If you do not get mail for some time, contact your post office and ask whether your address was recently submitted for a

“change of address” service.  It sounds strange, but it’s true.   

One way that criminals steal identities is to change your address at the local post office.  They redirect your mail to a post office box number and steal your mail looking for personal information such as bank statements, pre-approved credit card applications, and other pieces of mail they can use to steal your identity.   

They use this information to pose as you with lenders and run up huge charges in your name. Simply keeping an eye out on your mail can help you keep your credit score safe. 

Tip #10: Check your credit score regularly

You are more likely to notice problems and inconsistencies if you check your credit score on a regular basis – at least once a year and preferably three times a year.  Be sure to check your credit rating with each credit bureau, too. If you notice anything odd or anything you don’t recognize (such as a charge account you did not open) report it immediately.   

Sometimes, these errors are caused by mistakes made at the credit bureau, but they could be an indication that someone is using your identity.  In either case, such mistakes could hurt your credit score.  Fixing such errors improves your credit score.   

Tip #11: Beware of debts and credit you don’t use

It is easy today to apply for a store credit card that you forget all about in three years – but that account will remain on your credit report and affect your credit score as long as it is open. 

Having credit lines and credit cards you don’t need makes you seem like a worse credit risk because you run the risk of “overextending” your credit.   

Also, having lots of accounts you don’t use increases the odds that you will forget about an old account and stop making payments on it – resulting in a lowered credit score.  Keep only your used accounts and make sure that all other accounts are closed.  Having fewer accounts will make it easier for you to keep track of your debts and will increase the chances of you having a good credit score.  

Tip #12: Be careful of inquiries on your credit report

Every time that someone looks at your credit report, the inquiry is noted.  If you have lots of inquiries on your report, it may appear that you are shopping for several loans at once – or that you have been rejected by lenders.  Both make you appear a poor credit risk and may affect your credit score.  This means that you should be careful about who looks at your credit report. If you are shopping for a loan, shop around within a short period of time, since inquiries made within a few days of each other will generally be lumped together and counted as one inquiry.   

You can also cut down on the number of inquiries on your account by approaching lenders you have already researched and may be interest in doing business with – by researching first and approaching second you will likely have only a few lenders accessing your credit report at the same time, which can help save your credit score. 

Tip #13: Be careful of online loan rate comparisons

Online loan rate quotes are easy to get – type in some personal information and you can get a quote on your car loan, personal loan, student loan, or mortgage in seconds.  This is free and convenient, leading many people to compare several companies at once in order to make sure that they get the best deal possible.   

The problem is that since online quotes are a fairly recent phenomenon, credit bureaus count each such quote estimate as an “inquiry.”  This means that if you compare too many companies online by asking for quotes, your credit score will fall due to too many “inquiries.” 

This does not mean that you shouldn’t seek online quotes for loans – not at all.  In fact, online loan quotes are a great resource that can help you get the very best rates on your next loan.  What this information does mean, however, is that you should research companies and narrow down possible lenders to just a few before making inquiries.  This will help ensure that the number of inquiries on your credit report is small – and your credit rating will stay in good shape. 

Tip #14: Don’t make the mistake of thinking that you only have one credit report

Most people speak of having a “credit score” when in fact most people have at least three or more scores – and these scores can vary widely.  There are three major credit bureaus in the country that develop credit reports and calculate credit scores.  There are also a number of smaller credit bureau companies.   

Tip #15: Don’t make the mistake of closing lots of credit accounts just to improve your score

This seems like a contradiction, but it really is not.  Many people think that to improve their credit score, they just have to pay off some debts and close their accounts.  This is not exactly accurate.  There are several reasons to think carefully before closing your accounts.   

First, if you close an account you need (for example, if you close all your credit card accounts) then you will have to reapply for credit, and all those inquiries from lenders will cause your credit score to actually drop.   

Secondly, most credit bureaus give high favorable points to those who have a good long-term credit history.  That means that closing the credit card account you have had since college may actually hurt you in the long run.  If you have credit accounts that you don’t use or if you have too many credit lines, then by all means pay off some and close them.  Doing so may help your credit score – but only if you don’t close long-term accounts you need.  In general, close the most recent accounts first and only when you are sure you will not need that credit in the near future. Closing your accounts is a bad idea if: 

In the short term, closing accounts will lower your credit score, but in the long run it can be beneficial. 

Tip #16: Don’t assume that one thing will boost your credit score a specific number of points

Some debtors are led to believe that paying off a credit card bill will boost their credit score by 50 points while closing an unused credit account will result in 20 more points. Credit scores are certainly not this clear-cut or simple.   

How much any one action will affect your credit score is impossible to gauge.  It will depend on several factors, including your current credit score and the credit bureau calculating your credit score.   

Tip #17: Don’t think that having no loans or debts will improve your credit score

Some people believe that owing no money, having no credit cards, and in fact avoiding the whole world of credit will help improve their credit score.  The opposite is true – lenders want to see that you can handle credit, and the only way they can tell is if you have credit that you handle responsibly.  Having no credit at all can actually be worse for your credit score than having a few credit accounts that you pay off scrupulously.  If you currently have no credit accounts at all, opening a low balance credit card can actually boost your credit score. 

Tip #18: Never do anything illegal to help boost your credit score

It seems pretty obvious, but plenty of people try to lie about their credit scores or even falsify their loan applications because they are ashamed of a bad score.  Not only is this illegal, but it is also completely ineffective. Your credit score is easy to check and not only will you not fool lenders by lying but you may actually find yourself facing legal action as a result of your dishonesty. 

Tip #19: Dispute errors on your credit report

Contact each of the three major credit bureaus –  TransUnion, Equifax, and Experian – and get copies of your credit reports and credit scores.  Carefully read over the reports and note any errors.  In writing, contact the credit bureaus and ask that mistakes be removed or investigated.   

This is called a dispute letter and once it is received, credit bureaus have to investigate your dispute within thirty days of receiving your letter.  It is important to keep a copy of your letter and it is important to note the date the letter was sent.  You should not be accusatory or abusive in your letter – calmly and clearly state the problem and request an investigation.   

Tip #20: Add a note to your credit report if there is a problem you can’t resolve

Sometimes, there are legitimate reasons why you didn’t pay a bill.  If a contractor refused to finish a job or did a poor job, then you may have refused payment, but the non-payment may still count against you on your credit report.  If there are any unusual circumstances surrounding your credit report that may affect your credit rating – such as a case of identity theft – you can ask that a note be attached to your credit report to explain the problem.   

Tip #21: Make sure you know who is looking at your credit report and why

Many inquiries look bad on your credit report, but more than that you likely want to know who can see your personal financial information, now that you know that your personal information is stored in a credit report.  If you sign a document with a lender or apply for credit online, you can be sure that someone is looking at your credit report.   

Tip #22: Know the difference between soft and hard inquiries

When you pull your credit report to look at it, it is counted as a “soft inquiry.”  Only “hard inquiries” from lenders will affect your credit score dramatically.  Although checking your credit score too often is an expensive habit, you should not avoid checking your credit report because you fear it will make your credit rating worse.                                                    

Tip #23: Contact creditors as well as credit bureaus when correcting inaccuracies in your credit report

When debtors find mistakes on their credit report, they often only contact the credit bureaus.  While this is the most effective way to resolve the issue, you should in some cases contact the creditors whose account has caused a ding on your credit report.  This can help future dings and resolve problems faster. 

Tip #24: Look out where you get your credit report – and what it contains

You can get your credit score from any number of resources.  One place you can get it from is from credit bureaus themselves.  You can pay for the service, but you qualify for one free credit report a year or qualify for a free credit report if you have recently been turned down for credit or if you think you may have been the victim of identity theft.   

If you can, get a copy of your free credit report from each of the three major credit bureaus.  If you can’t get a free credit report, you should still try to get one, even if costs a few dollars.  The savings you will enjoy on your loan rates when you improve your credit score will more than pay for the cost of the reports. 

There are a number of online companies that offer free online credit reports.  These offers are very attractive because you get an online report without having to wait for a report to be sent to you, and you often can get several reports from the different credit bureaus at once, which can save you time.   

Buyer Beware.

Tip #25: If you have bad credit, establish better credit by taking out credit and repaying it quickly

If you have terrible credit following a bankruptcy or other major financial upheaval, you may need to get back into a good credit rating by taking out a loan you can handle.  Make an appointment to see your bank or bad credit lender a few months or years after the problem in question and arrange for a small loan.  

You should have enough savings to pay for the loan before you do this.  Pay back the loan quickly.  It will not hugely boost your credit score but it will show lenders that you are having an easier time paying your bills.  Taking out a small loan you can repay is part of the slow process of reestablishing good credit following a big financial problem. 

Tip #26: Try secured credit if you cannot qualify for other types of credit

Secured credit is credit or a loan which uses something as collateral.  In some cases, this could be an asset like a house.  In some cases, this collateral could be money frozen in an account by the bank for just such a purchase.   

If you need credit following a big problem with your credit score, secured credit may be something you can qualify for. You can use this secured credit to reestablish a good credit rating so that you will qualify for other loans in the future.  You may have to pay slightly higher interest if your credit score is quite low, but in the long term repaying this type of loan can improve your credit score. 

Tip #27: Give it time

Many people believe that simply paying off debts will improve their credit score at once.  This is not true, unfortunately. Paying off your debts and resolving problems will help your credit score (since overdue accounts will be marked as “paid” on your credit report), but only time will remove the mark of the problems from your record entirely.  

Tip #28: Contact your banks and ask credit limits to be reduced

If your credit risk rating is poor, and especially if it has taken a beating lately due to nonpayment or other problems, you can ask that your bank reduce the credit limits on your credit cards, credit lines, and other debts.  You should do this if: 

  1. You can pay off at least 50% of your debt loads as they are readjusted.  For example, if you have a credit limit of $5000 on your credit card and get it reduced to $2500, you should make sure that you can leave a balance of $1250 or less.  If you owe $4000 and have no way of repaying it, getting your credit limit reduced can actually hurt you.  On the other hand, if you need to get a larger loan and can pay off your credit card in full and reduce your limit to $2500, you may be able to improve your credit score in this way. 
  • You have lots of credit. If you have several types of debts and credit accounts – lines of credit, credit cards, store charge cards, a mortgage, a car loan, and a personal line of credit – you may be close to overextending your credit, especially if each of these accounts is fairly large. 

You can’t always close down your accounts – especially if you are still paying your debts off – but reducing the limit may make you eligible for a loan should you need it. 

  • You have some credit but you don’t want to close your accounts entirely because you have not had credit for very long.  Sometimes, if you have several types of credit, it is not wise to close them, even if you can, since lenders like to see long-term relationships with lenders.  Reducing the limits can make monthly payments more affordable and can actually give you a bigger credit boost than closing long-standing credit accounts. 
  • You will not be taking out a loan very soon.  In the short term, reducing your credit limits may actually lower your credit rating because your balances will make up a larger portion of a smaller credit, but in the long run smaller charge accounts will actually boost your credit score by making repayment of loans easier and by making you further from overextending your credit. 

Tip #29: Start repairing your credit right away after a big financial upset

A big financial problem is an emotional as well as a monetary burden.  Plenty of debtors feel so terrible about their financial problems and so uncertain about their money that they go into deep denial, refusing to think or work on their financial problems.  This is likely to only make the problem worse.   

Everybody suffers from financial difficulties once in a while and every professional in the field of finance – from loan managers to bankers – knows this.  Plus, financial professionals – including lenders – want your business and so are willing to work with you to help you solve your problems.   

Tips #30: Consider co-signing for loans – but consider well before taking the leap

If you have very poor credit scores following a bankruptcy or other disaster but need to get a loan, consider getting a co-signer.  If your co-signer has assets or a better credit record, you may qualify for a better loan rate.   

However, be wary – if your co-signer refuses to make payments, then both of you will suffer the credit fallout.  Co-signers share responsibility for loans and credit – both of you will have worse credit scores if one of you does not pay.  

On the other hand, if your cosigner has good credit and makes payments, then the co-signed loan can actually boost your credit score. 

Tip #31: Don’t overlook bankruptcy

A bankruptcy will affect your credit score more than just about anything.  Worse, it will affect it for many years.  In the first few years after a bankruptcy, you may not be able to get loans at all.   

In short, a bankruptcy is a legal proceeding that either forgives you of your debts or allows you to pay off just a small fraction of your debt.  It will nearly ruin your credit rating at first, but it will also allow you to dig out from overwhelming debt and reestablish a good credit rating again after years.  A bankruptcy will no longer show up on your credit report after ten years.   

If you are very seriously in debt and have no way of repaying your bills, a bankruptcy can help you by stopping collection call agencies and other problems.  Also, if you have been very negligent in paying your large debts, your credit rating has already likely suffered greatly.   

While a bankruptcy will depress it even further, at least it will give you the chance to repair your credit by giving you a “clean slate” free from large debts. 

Tip #32: Don’t choose bankruptcy as an easy out

Bankruptcy is a serious credit problem – it is not just a “ding” on your credit report – it is a huge red flag to lenders.  After a bankruptcy, you will be ineligible for credit cards, many types of credit and will even be told what you can and cannot buy.  The procedure of bankruptcy can also be draining.  Bankruptcy should only be chosen as a last option if you really require your debts to be forgiven because you have no way of repaying them. 

Tip #33: Learn from your mistakes

Everyone makes some credit mistakes sooner or later – it is very rare for someone to go through their entire lives without at least a few dings on their credit risk record.  Don’t beat yourself up over your mistakes – even if they are large ones.  Instead, learn from your mistakes by analyzing them.  Think of your credit mistakes as clues which can help you in the future to avoid the same problems:  

-Do you develop credit problems because you overspend while shopping?   

-Are you so disorganized that you forget to pay bills?  

-Are your bills simply too large for your current income? 

-Do you routinely get overcharged for things and fail to notice until much later? 

Knowing what your mistakes are and finding solutions to the problems can go a long way towards helping you develop a good credit risk rating. 

Tip #34: Seek professional help

If you are in over your head, and your credit is so bad that you cannot get a loan and may even be facing bankruptcy, you may want to seek help from professionals.  There are a number of financial professionals that can help you with credit repair: 

Bankruptcy lawyers and bankruptcy advisors: Bankruptcy lawyers can help represent you in bankruptcy proceedings.  Advisors can help you decide whether to apply for a bankruptcy and how to proceed once you do decide to file.  

Credit repair companies and credit counseling companies: These companies can help you by acting on your behalf with credit companies, by advising you on what you can do to repay your bills faster, and by helping you make better financial decisions. 

Accountants and tax services: Accountants and tax filing services can help you make the most of your money by making sure that you do not end up overspending on taxes. 

Bankers and bank officers: Most banks today want to not only help you keep your money but are willing to work with you to make the most of it.  As a banking service, many banks today offer free investing advice, saving advice, and personalized meetings with bank officers that can help you figure out your money situation. 

Lenders and bad credit lenders: How you deal with lenders will determine how well your credit score works. Avoiding too many inquiries by not applying for too many loans, establishing long-term business relationships with bankers, and doing business with bankers in an organized and professional way (i.e. paying your debts on time) will go a long way towards giving you a credit rating.  In turn, a good credit rating will make it easier to deal with lenders.   

Tip #35: Look out for credit repair companies

Many companies out there advertise that they can help you with credit repair, but the quality of these services – not to mention what they offer – varies widely.  Some companies really can help you with credit repair while others are actually under investigation for suspect business practices.  If you decide to seek help from a credit repair company, be sure that the company is legitimate and offers you viable services.   

Tip #36: Seek free or inexpensive help before seeking paid credit repair help

If you need credit repair, odds are good that your finances aren’t in the best possible shape.  That likely means that you should attempt to spend as little as possible on credit repair – the money you save can be channeled into repaying your debts. 

Tip # 37: It will be easier for financial experts to help you if you seek credit repair help sooner rather than later

If you do decide to seek credit repair help from the experts, it makes sense to seek that help before your financial situation spirals too far out of control.  After all, credit repair experts can do little for you if your credit and financial situation is so bad that the only option left to you is bankruptcy. 

Tip #38: Look out for credit repair scams

There are a number of credit repair scams out there.  These scams often promise to help free you of bad credit, when in reality the “experts” offering these services will either overcharge you, involve you in illegal activity, or actually put you in a worse financial situation.  Look out for these most common scams: 

  1. Credit repair companies that tell you to lie on loan applications or suggest that you develop a second identity.  This is illegal and dishonest. If a company suggests that you open accounts in a new name or falsify your information on loan applications, run, don’t walk, away.   
  • Credit repair companies that charge you fees or hidden fees for things you could do for free yourself – such as work out a budget. Also be wary of companies that ask for money up front. 
  • Credit repair companies that promise to pay your creditors from money you pay to them and which they keep in an escrow account.  This is a common scam and it presents a huge problem for the debtor.   
  • Credit repair companies that pressure you, don’t listen to you, or want you to sign a contract you have not read. Such companies are not to be trusted and should be left well enough alone. 
  • Companies that offer you fast or instant credit repair – no matter how bad your credit.  This is simply a misleading a claim that no company can legitimately deliver on.  If you have very bad credit, it may take years to fully repair.   
  • Companies that don’t tell you your rights or try to take money for things you could do yourself.  You can get copies of your own credit reports and have the errors on them fixed for free yourself – a company that does not tell you can do this yourself ifs taking money form you for things you can easily do yourself.   

Tip #38: Get a good team on your side to help you with your credit score

A good team of professionals can help you get your credit score back in shape.  Your most important member of your team is yourself – you are the one with the financial agency and the knowledge to become your own best advocate in credit repair.  Besides this, you may want to check with your local library for financial help books.  You may also want to include financial experts such as credit counselors or others to help you.  If you decide to seek a team of experts to help, be sure that you check each person’s credential, standing with the Better Business Bureau, and past clients to make sure that the person or company can really help you.  Beyond this, make sure that you sign a contract or agreement with each professional member of your team.  

Tip #39: Your bank has good and reliable credit information

One free and professional source of credit information is your bank.  Your banking officer may be able to offer you a great deal of professional, free advice, especially as banks are trying harder and harder to provide good personal services to customers.   

Your bank may also have a number of credit solutions – such as overdraft protection – that can help you keep your credit in good repair. Banks are realizing more and more that many of their clients are dealing with less than ideal credit.  Banks are trying to meet the demands of this new group and can actually be a powerful ally for those who are trying to improve their credit. 

Tip #40: Learn to budget

One of the biggest reasons that people develop poor credit is overspending.  In many cases, this overspending is caused by a lack of budget.  A budget can tell you how much you should be spending on each item in your life.  This allows your financial life to stay nicely organized.   

Tip #41: Live within your means

Many people believe that if they only had more money, they would not have to worry about credit.  In fact, this is not true.  Many people who have money – or at least have all the trappings of money, including cars and nice homes – in fact have terrible credit.   

Tip #42: Get out of the spending habit

We are surrounded with advertisements that tell us to buy, buy, buy.  When we want to read a book, we buy it.  When we want to go somewhere, we take a cab or drive rather than walking.   

Stopping spending consciously can be hard, but heading to your local library, walking instead of taking a car, buying a used computer instead of a new one – all can help you spend less and save more. There are several ways you can save money and pay off your debts faster by spending less: 

  1. When you head out, carry a small amount of cash with you and leave your credit cards at home.  That way, you will not be able to overspend. 
  • Stop catalogs from arriving at your house or discard them unread – advertisements and catalogues encourage you to spend and buy when you don’t need to. 
  • Do it yourself. Eat in rather than dining out.  Dining at restaurants or getting food delivered is always more expensive than doing your own cooking. Also, do your own taxes rather than farming the job out to someone else.  Wash your own car, run your own errands, mow your own lawn.  When you do something yourself, you spend less. 
  • Watch less television.  It sounds strange, but television can make you overspend – television contains many professionally-created advertisements pushing us to spend and spend.  These ads are so well done that not spending after watching them is sometimes very difficult (just what advertisers want!).  Switching off your television can help you avoid temptation. 
  • Make do or do without.  While you are repairing your credit, channel all your extra money into paying off debts and reestablishing good credit.  Make so with what you have and avoid shopping as much as possible. 
  • Buy discount or used.  Whether it is furniture or shoes, you can save money by refusing to pay retail price.  

Saving your money by spending less can let you pay off your debts faster, something that can improve your credit score dramatically.   

Tip #43: Save

One of the best ways to ensure that your credit rating stays good is to save money each month.  Whether you are able to save $25 a month or $200 or even more, saving and investing your savings will prepare you for financial emergencies, will get you out of overspending, and will allow you to build investments that can help you in later years.   

With savings at your bank, you don’t have to worry that sudden illness will make you unable to pay your bills, resulting in dings on your credit.   

Tip #44: Keep track of your money

Most people are surprised by how quickly their money seems to be spent.  This is because impulse spending and small-change spending really adds up.  Small-change spending is small spending we do without even thinking about it – buying a coffee or a newspaper we don’t need.   

Impulse spending refers to simply buying things we don’t use or need.  In both cases, we end up spending too much unnecessarily, and this is a problem in credit repair because you want to be channeling as much money as you can into savings and debt repayment so that you can repair your credit.   

For a month, try keeping a daily record of every penny you spend – including the money you spend on phones, the money you spend on tips, everything.  You will be amazed where your money goes. Keeping track of your money this way does two things:  

  1. It automatically cuts down on spending.  If you have to write down where you spend your money, you will be much more careful what you spend your money on. 
  • It allows you to see where you waste your money and take steps to stop the bad habit.  If you notice that you always buy the newspaper on Saturday but never read it, for example, you can stop buying the paper on that day.  Small savings can add up over the years and can put you in good financial shape which will be reflected in your credit risk rating. 

Tip #45: Take out one pleasure and save it up

-Do you have cable?   

-Do you subscribe to lots of magazines?   

-Do you build your DVD collection so fast that you can’t even watch all the movies you collect?   

We all entertain ourselves with money, but most of us have at least one or two entertainments that we have either outgrown or don’t enjoy as much as we once did.  Cutting that expense out and investing the savings can put us well on our way to saving for retirement or paying off our bills.  If you give up your cable television, for example, you can pay off your credit cards that much faster, improving your credit score.   

Tip #46: Build assets and capital

Whether it is buying a car, a home, or creating an investment portfolio, having assets can help improve your credit score by allowing you take out secured credit, or credit in which your assets are used as collateral.   

When you take out secured credit (such as a mortgage) you enjoy lower interest rates and easier approval.  As you repay your secured debt, your credit score will improve.  Even better, lenders do look at the types of credit you have.  If you have a mix of secured and unsecured credit, you will enjoy better risk rating scores as it will indicate that you have the means to repay your debts.  

Building assets and capital is also a way of building financial stability which can help protect your credit score.  If you have assets such as savings or investments, then you have a way of generating income or repaying debts in case of an emergency.  You also have ready money you can use in case of unexpected medical bills or other problems. 

repair your credit,

Tip #47: Find more ways to income

While you are repairing your credit, you will want to channel as much money as you can into savings and debt repayment.  For this, having a second income or even just a few hundred dollars a month more can mean that you get your credit into shape faster.   

Having a secondary form of income can also keep your credit safe – if you lose your job, you can use the money you make from a secondary source to repay your bills until you find another form of employment.   

There are many ways to get more income: 

-You can ask your employer for a raise.   

-You can start to sell something through the Internet or through a company.   

-You can establish your own small business that can be tended to on the side.   

-You can rent out part of your home to make some extra money.  

-You can get a part-time or weekend job.  

Whatever you do, finding an alternate source of income can help your credit immensely. 

Tip #48: Prepare for financial emergencies

Few of us think about what would happen if we lost our jobs or suddenly became too ill to work.  The thought is simply too terrible to contemplate in many cases, especially if we are living paycheck to paycheck with a job as it is.   

The fact is, though, that financial emergencies happen to almost everyone at some point and they can have devastating impact in your credit. In fact, most people who declare bankruptcy do so because of a huge financial disaster such as sudden unemployment, huge medical bills, a lawsuit, or divorce. Despite this, few people plan for these problems, even though they can happen to anyone.   

If you want to keep your credit score in good trim, you should know exactly what you would do in case of an emergency.  Developing an actual written plan can help you by letting you take action to save your credit as soon as an emergency occurs.  Some items that could be on your financial emergency plan could include: 

  1. A list of all assets you could liquidate if you had to. 
  • A list of all extras or luxuries you could cut out of your life right away if there was a problem (i.e. newspaper subscriptions, cable television, water delivery service, Friday nights at the movies). 
  • A list of any resources you have that could help you in case of an emergency.  Maybe you know a lawyer who deals in financial facets of the law.  Maybe you have insurance that could help you.  Maybe your employer offers a severance package.  Whatever it is, write it down. Keeping a list of these resources will make them easier to access in case of an emergency. 
  • Other ways you could get money if you had to – jobs you could take, things you could rent out to others.  

Tip #49: Get overdraft protection, insurance on your credit cards, or other services to keep your credit in good shape

Talk to your bank and lenders about services they offer to keep you safe. Overdraft protection, for example, is a basic service that often costs nothing or very little extra but which protects you in case you withdraw too much money from your bank account.   

With overdraft protection, you do not get a “ding” on your credit report or a charge for insufficient funds.  In most cases, you get a day or two to add more money to the account to cover the gap.  Some credit cards and other loans offer a similar service or offer insurance which protects you in case you lose your job and are unable to pay for a few months.   

Tip #50: Get insurance

Insurance for health, your car, your home, and for liability can help you avoid the huge legal and medical bills that can occur from an accident or sudden problem.  For a small monthly fee, you are covered against unexpected events that can drain your finances and leave you with out-of control debt.   

Tip #51: Get a prenuptial agreement and have a lawyer go over all your business contracts

Most bankruptcies are caused by the fallout that occurs as a result of business failures, law suits, health costs, and divorces.  Getting a prenuptial agreement helps to ensure that a divorce will not adversely affect your finances and lead to a ruined credit rating (keeping accounts separate while married is also a good idea, as your spouse’s own financial troubles can all too easily become your own).  Having a lawyer look over contracts can at least reduce the risks of unfavorable agreements that can put you at a disadvantage in business. 

Tip #52: Know how money works  

Reading books about money and understanding how your accounts and loans work can go a long way towards helping you keep your credit in good repair.  For example, if you know that some loans will charge you extra if you pay off your loan faster while others will not, you will be in a better position to make financial decisions.    

Tip #53: Take care of those things besides a credit score that affect how lenders view you

Lenders will often look at not only your credit score but at other financial indicators, such as your income, employment record, and savings.  Keeping these things in order can complement your credit score and can help you get good overall credit. Some lenders have their own ways of calculating credit scores, so keeping your overall financial system in good shape is one way to ensure that you are in good shape in all lenders’ eyes. 

Be aware that when lender ask to see your credit score, the credit bureaus send not only your credit score, but also the top four reasons why your credit score is lowered.  The most common reasons for lowered credit scores are: 

  1. Serious delinquency in repaying accounts or bills. 
  • Public record of bankruptcy, civil judgment, or report to a collection agency 
  • Recent unpaid or late paid debts or accounts
  • Short-term credit record 
  • Lots of new accounts 
  • Many accounts have late payments, defaults, or non-payments 
  • Large debts or amounts owed. 

Tip #54: Follow up on closed accounts

You closed a store card years ago – but is it still listed as an open account?  Bureaucratic mixups happen, often quite frequently.  If you want to keep your credit score good, you need to follow up on financial details.   

Whenever you close an account – whether it’s a credit account, bank account, or utility company account, make sure that you get written confirmation that the account is closed and paid in full and then follow up a few months later with the company to confirm the closed account.  This simple precaution can save you hours of frustration – not to mention a lowered credit score. 

Tip #55: Don’t move around a lot

Lenders like to see stability – it suggests stability in financial matters as well as in your life, and makes you a better credit risk.  Plus, every time you move, you may have to change your credit information – including switching banks.  This actually negatively affects your credit score by not allowing you to develop long-term relationships with lenders. 

Tip #56: Don’t change jobs frequently

Of course, there will be times when you will have to change jobs.  However, avoiding changing jobs unnecessarily will help improve your credit score by allowing you to stay in one place and build a steady financial situation.   

Your credit report also shows your current and past jobs – if a lender sees that you change jobs frequently, he or she may wonder whether you have the life stability required to handle debt responsibilities.  Also, the lender cannot see why you left a job.  If there are many employers listed on your credit report, the lender may wonder whether you have not been fired from jobs and whether that is an indication that you will be unable to pay your debts due to unemployment at some point in the future. 

Tip #57: Avoid changing switching credit companies and credit accounts a lot

Credit companies will often offer you special introductory rates, generous free gifts or other incentives to switch companies.  However, you should resist the temptation unless you have a reasonable reason to switch. Establishing a good credit relationship with one company – having one credit card from your college days, for example – is a good way to show lenders that you are a steady sort of person who is likely to take money matters seriously.  That is exactly what lenders want to see. Switching accounts and lenders makes you appear fickle and less than reliable. 

Tip #58: Keep your records up to date

Not knowing what is going on in your own financial life is courting disaster.  Keep one file folder in your home which contains your financial information – and review this periodically.  If something changes in your life – you get married, you start a family, you move or change jobs, look through your financial folder and contact everyone who needs to be contacted to update them on the change.  This will help make sure that all your creditors have the information they need about you. Keeping your own records up to date will help you make sure that everyone who handles your finances is also up-to-date. 

Tip #59: Always be sure that your creditors know your current address

If you move and forget to inform all your creditors of your new address, you may not get all your bills, making you look like a deadbeat debtor and making your credit score plummet.  Make sure that you either close your credit accounts or get your new address and contact information to your creditors.  

Tip #60: Talk to lenders and creditors

Many people are hesitant to keep an open line of communication with their lenders because they are embarrassed about their financial state or because they feel unsure about the position.   

Talking to lenders as soon as a problem develops can be an effective way to prevent a ding on your credit score that can affect your credit score.  For example, if you are giving trouble paying your bills, you can often work out a more reasonable payment schedule.   

Tip #61: Get lenders to waive late fees and charges

If you have missed some payments or made some late payments, lenders will often charge you a fee for non-payment.  This not only adds insult to injury – you have to pay more on your bills and get a ding on your credit – but also makes bills more difficult to repay since the bills are now higher.  You can phone the lender and get the charge waived in most cases, though.  This is a secret that credit repair companies have long known and is one of the first services they will perform on your behalf.  You can easily accomplish this for yourself, however, at no cost. 

Lenders want to get paid, and if they think that you will pay your bill more quickly by waiving the late fee, they will most often gladly remove the fee in exchange for prompt payment. 

Tip # 62: Stay financially organized

Keep all your financial records – including tax records – in one place.  Note the days you paid your bills on the bills themselves.  Note how much you owe and where you owe money. 

Keeping your financial information in one place allows you to refer to it easily.  Seeing all your financial life in one place also makes it easier for you to see where your credit and your financial life still needs work.  

Tip #63: Set short-term goals and do frequent credit self-checks in order to track your progress

Credit repair takes time and effort.  Some days, it will seem that you are getting no closer to a better credit score at all.  In order to keep track of your progress and in order to keep going forward, you need to set goals and keep track of what you are doing.   

Tip #64: Take care of the details when applying for credit or for a credit report

Little things make a big difference.  Misquoting your social insurance number or using a slightly different name (Jane Doe Smith instead of Jane Smith) can make a big difference, since credit bureaus can count the two names as different people.  Making sure that you fill out each financial form accurately and in the same way can go a long way in ensuring that there are no mistakes in identity that can affect your credit score. 

Tip #65: Don’t make the mistake of thinking that small differences in credit scores or loan interest rates won’t make a big impact

A few points on a credit score can mean the difference between a lender offering you a prime rate reserved for the best credit risks and the worse interest rate offered to less than prime

customers.  This may amount to only a few percentages in different loan rates, but this can make a huge impact, especially on a large purchase.                                                    

Tip#66: If you need to repair your credit, stay organized with a to-do list that ensures you won’t forget anything

As you can likely tell by now, credit repair is not one magical solution but rather lots of relatively small things you can do to help repair your credit.  To make sure that you don’t overlook any one thing, you may want to develop a to do list that you can post and check off.  

Tip #67: Automate your finances

Thanks to automatic bank payments, you can have your bills taken out of your checking account each month or even charged to your credit card.  If you are the sort of person who gets dings on their credit report because you can never remember to pay your bills on time, this can be a very useful service.   

Tip #68: Refinance loans

If you got a poor deal on a loan – especially a major loan such as a car or home loan – or if your credit rating has improved since you got your loan, you may want to consider refinancing.  Refinancing means that you take your loan to another lender in order to enjoy better terms or rates.    

You don’t want to do this too often – it prevents you from developing long-term relationships with lenders and results in inquiries on your credit report – but if you have good reasons to refinance, it can actually help you repay your debts.  For example, if you can get more reasonable monthly bills that you will actually be able to repay, refinancing can help prevent all those non-payment credit dings that come from not being able to pay your bills.  Making your payments more affordable can save you money and can save your credit score.          

Tip #69: Look for loans that are offered for bad credit risks

If your credit score is bad but you need a loan, consider services that cater to people with poor credit scores.  These companies know that some creditors with poor credit scores will still make their payments on time and so are willing to speak with debtors’ other companies would reject out of hand. You may have to deal with higher interest rates, but choosing a bad credit lender can go a long way to ensuring that your credit score won’t disqualify you for a loan.   

Tip #70: Always know your credit score before speaking to lenders

Many people assume that having an excellent credit score is enough when applying for a loan.  It is not.  Some lenders are not terribly scrupulous about offering you the best rate – especially if they can gain by having you pay higher interest.  Some lenders will try to tell you that your credit score is lower than it is and that disqualifies you from a better rate.  Some may rely on your ignorance (or what they think of your ignorance) about your credit score to quote you a worse rate.     

Tip #71: Consider speaking to lenders face-to-face if you have a bad credit score

If you apply for a loan over the telephone or online, your credit score will count the most, because that is all the lender will likely look at before getting back to you with a quote.  If you have bad credit but still need a loan, meeting with a lender face to face is your best bet because an actual meeting allows a lender to get an impression of you, and allows you to explain the problems you have had in the past and the things you are doing now to make yourself a better credit risk.   

When you meet worth a lender in person, you force them to stop looking at you as a credit score number and make them look at you as an entire person.  This can be a huge advantage for you (especially if you are personable) and can help you get the loan your credit score does not completely qualify you for. 

Tip #72: Don’t let a bad credit score make you swear off purchases you must make

You will make life much harder on yourself if you deny yourself things you need – such as medical treatments – because your credit is poor. If you have bad credit, but need money for something urgent, consider a secured loan or a bad credit loan with generous terms.  Do not let bad credit affect your ability to stay safe and healthy. 

Tip #73: Make arrangements to pay your bills when you are on vacation or ill

When we go on vacation, of course we want to get away from it all, but when we forget to pay our bills while away, we risk getting dings on our credit that can affect our credit risk rating.   

Tip #74: Consider online banking or telephone banking to make bill payment easier

If you have trouble getting your payments in on time, consider online or telephone banking.  This simple system is now available virtually and can help you pay your bills in minutes – at any time of the day or night.  If you travel a lot, on line or telephone banking can be a real life-saver as it will allow you to pay your bills no matter where you are. 

Tip #75: Simplify your bills

You can often get great discounts by choosing to get several services from the same company – for example, a package deal from your phone company can give you internet access, long distance phone plans, and cable television – all on one bill and all in one low price.  Pooling your insurance into one package from one insurance provider can have the same effect. Reducing the number of bills, you get can make it easier for you to pay your bills and so reduces the chances that your credit rating will be affected by non-paid or late paid bills. 

Tip #76: Pay your bills as soon as you get them

If you leave your bills until later, you may forget and end up being listed as a late payer.  Some companies may not report you to credit bureaus right away, but others report even one skipped or late payment, which can show up on your credit report and affect your credit rating. 

Tip #77: Set aside a regular day, time, and place for paying bills

If you are too busy to pay your bills as they arrive, set aside one hour each week for paying your bills and ordering your finances.  Have the same place and time set aside each week, so that paying incoming bills and taking care of your finances becomes an automatic good habit.   

Tip #78: Record your financial duties on a calendar – just like all your other appointments

If you mark down when bills are due, when you need to make payments, and what you need to accomplish to boost your credit score in a visible place you check often, you are less likely to overlook important appointments and deadlines.   

Tip #79: Go online

There are a number of online resources that can help you find credit information and can help you with your credit repair project: 

The FICO web site – www.myfico.com – contains lots of useful credit repair information and even allows you to order credit reports and scores.   

The credit bureaus (transunion.com, equifax.com and experian.com) allow you to order credit scores and credit reports online.   

Through the online sites you can also get information on reporting errors on your credit report.  Your bank likely offers online banking as well, which can make managing your accounts easier and simpler for you each month.   

Tip #80: If you are a student, you have a great secret weapon for credit repair and credit help – your school’s financial aid office

If you are a college student, your school’s financial aid office should be one of your first stops at the campus.  Few students visit this office regularly while they are in school, and this is a mistake.  The financial aid office at most universities and colleges has more than enough information to help you keep your credit score in tip-top shape.   

The financial aid office offers one-on-one financial counseling, information about scholarships, tips on budgeting, books on money, and many more resources.  The officers at your university or college financial aid office can offer you help on almost any aspect of financial help – including helping you figure out credit scoring.  Plus, many financial aid offices have workshops that can teach you about dealing with money and credit, and even offer free tax filing services, services that are extremely useful.   

Tip #81: If you are a student (and especially a student with student loans), budget carefully

Student loans need to be paid back and are more and more often for large amounts.  Taking out the smallest loans you can and sticking to a budget can help establish good credit habits that can help ensure that you have a good credit score when you leave university.  Plus, since student loans are for a limited amount, you can easily budget because you will know exactly how much money you will make each month and how much money you will be spending on student housing, tuition and other expenses. 

Tip #82: Try to pay for education through means other than loans

Student loans are becoming a problem for more and more students.  On the one hand, student and college loans can help students who could otherwise not afford go to college or university.   

On the other hand, though, huge student loans can be a terrible financial burden after graduation.   

While it is true that most college and student loans do not have to be repaid until after graduation, the time after graduation usually carries some large financial responsibilities.  Many college graduates want or need a car, a good job, and possibly a house or home.  Each of these things requires a good credit standing, but too large student loans not only require larger monthly repayments but also may affect credit scores by overextending credit.  

As tuition fees rise, larger student loans are becoming the norm, leading to financial hardship down the road for many students.  To avoid this, you should take out the smallest loan you can, relying on jobs, savings, scholarships, bursaries, and other forms of financial aid to make up the rest of your tuition and living expenses.  You should rely on loans as a last – not a first – alternative.   

Tip #83: (Almost) never default on a student loan

Many students think that defaulting on a student loan after graduation is a smart way to get rid of a debt.  After all, they no longer need the money for school and in fact need the money for settling into a job and new home.   

If you are having trouble repaying your student and college loans, speak to the lenders rather than ignoring the problem.  Most lenders will actually give you a six-month grace period after graduation so that you can find a job and settle into post-college life before repaying your loans.   

Read your loan agreements carefully to find out what your student loans are like and what is forgiven in them.  If you need to, work out a different payment schedule, seek out refinancing, or find some other way to repay.   

Tip #84: Save money by taking advantage of student discounts or student life  

One of the advantages of student life is that it is inexpensive.  Student housing or rooms rented with roommates create inexpensive living, on-campus facilities offer great services at discount rates, and many businesses offer student-only deals.  

 Try to take advantage of these offers to make your student money stretch further so that you have take out the smallest student loans possible.  Look around to find the best student-deal offers, ranging from travel deals to free tax filing services, available from your campus and from surrounding businesses.  

Tip #85: Follow the “cash for wants, loans for needs” rule

Many students fall in love with their credit cards.  Credit card companies know this, too, and routinely heavily advertise on college campuses, even offering students free food or gifts to fill out a credit application.  While the convenience of credit cards is tempting, it is a good habit to use credit cards only for major purchases, saving cash for entertainment, food, clothes, and other like items.  This is because studies have repeatedly shown that those who pay cash for items routinely spend less than those charging or using debt cards to pay.   

Tip #86: Make learning about money a priority

Whether you attend information sessions at the financial aid office, read about money in books, or meet with your bank’s financial officers, learning how to manage your money is an important part of school life.   

Tip #87: Start building credit early – and do it well

Start building credit early – even before college starts, if you plan on taking out college loans.  Ask your parents to sign over a bill that you pay on time each month.  Get a credit card with a low limit and a bank account that you balance each month.  Avoid opening several charge cards at once – not only will they be hard to repay, but having several new accounts when you have a

short credit history will actually cause your credit rating to drop. Get a part-time job.   

Tip #88: Consolidate your loans to make repaying them easier

Having lots of loans and debt is one of the biggest reasons leading to poor credit ratings.  The larger your debts, the worse your credit rating and the more likely that you will find yourself with large monthly bills that are difficult to repay.   

Consolidating your loans means that you take out one large loan to repay all your creditors so that you only have one large loan to repay.  While the overall amount of the loan does not change – if you owed $20 000 to five different companies, you will still owe $20 000 but to only one lender – but the interest rates and monthly payments are usually quite smaller and this can help meeting your debt obligations much easier.   

Debt consolidation can be an especially good idea if you have lots of high-interest debt and lots of bills that are hard to keep track of.  One smaller monthly payment will be easier to remember and will help make bill time less painful. 

Tip #89: Pay down your debts by making larger than minimal payments

If you only pay down the minimum amount on each of your loans, it will take you a long, long time to pay down your loans.  This is because most lenders only require that you pay down slightly more than the interest amount on your debt each month.  Even a debt of a few hundred dollars could take several years to repay this way.   

Paying down your debts by putting down more than the minimum required monthly payment can help you pay down your debts faster and so can boost your credit score.  Paying down more than you need to also shows lenders that you are in good financial shape and conscientious about your debts – two qualities that definitely make you an attractive credit risk to lenders.   

Tip #90: If you are taking out a new loan, consider putting down a larger down payment to take out a smaller loan

Doing all you can to take out a smaller loan – by putting down a larger down payment or buying a less expensive car or home (if that is what the loan is for), for example – can help ensure that you don’t overextend your credit and can help ensure that your monthly payments on the debt will be reasonable and affordable to you.   

Tip #91: Use loan calculators to estimate your finances and keep your credit rating in good shape

Online loan calculators are a useful tool that can help you determine how much of an interest rate you should pay, how much in monthly payments you can afford, and how much your loan will cost you in interest over the long term.   

Online loan calculators are free to use and can help you figure out how to make your debts more affordable.  There are online loan calculators for auto loans, home loans, and personal loans.  If you are going to be getting a new loan, these calculators can be a powerful resource. 

Tip #92: Avoid payday loans

Payday loans are also called “cash advance loans” and they are small and short-term loans that carry very high interest rate.  Some companies have even begun to advertise them as loans to help you repair your credit, but this is very misleading. Some companies suggest that these loans can help you pay off your bills and so establish good credit, but if you cannot afford to pay your payday loans on time, you have to “roll-over” or extend the loan – often at huge expense and interest.  Many people get into a payday loans cycle, whereby much of their monthly paycheck goes towards paying off their ever-growing payday loans.  

Tip #93: Do not use one debt to repay another

This results in accumulating interest and so increasingly unpayable bills.  If you use one credit card to pay off another, for example, you are paying interest on interest, and paying off the new credit card bill will be more difficult.   

This method will also mean that you will always be looking for new credit and new debt to pay off your increasing debts.  It makes more sense to get a second job or arrange for a new payment schedule.   

Tip #94: Give Yourself a Break

There is no point in beating yourself up over your credit score – whatever it is.  Instead, promise yourself that you will do better in the future and then work to repair your credit rather than working on berating yourself.  Taking action to improve your credit rating will improve your outlook as well as your credit. 

Tip #95: Don’t make excuses

If you have been the object of identity theft or have genuinely been mistreated by a company, then by all means include an explanatory note in your credit report.  However, most lenders do not want to hear a lot of excuses.  Whatever your problems have been in the past, you will seem like a much more reliable lender if you focus on what you are doing to get out of problems.   

You will feel better and get better responses from lenders if your focus on current action rather than past mistakes.  Instead of wallowing in pity and explaining in great detail the personal and financial problems that led to a bad credit rating, give yourself and lenders the condensed version and then move on to a detailed review of what you are doing to repair your credit. 

Tip #96: Give Yourself a Treat – without affecting your credit rating

Reestablishing good credit is hard work and daunting as well.  Once in a while, as you reach a milestone, you need to reward yourself.  You should do this through some means that do not involve debt or money.  If you repay your credit card bill, there is no sense in running up that bill again on a shopping trip.  

 Instead, you should list some inexpensive and fun treats you could give yourself.  Keep this list wherever you keep your financial file.  As you reach a big milestone, take out your list and immediately reward yourself with one of the items on the list.  This will not only keep you motivated, but it will inexpensively keep you from feeling too deprived while you work on your credit score. 

Tip #97: Work on your emotional response to debt and money

Most of us carry a lot of emotional baggage with us when it comes to money.  We see money as a marker of success, or we see money as a way of making ourselves feel better, and these attitudes lead us to much of our financial and credit problems.  If we rely on money to make us feel successful, then we are apt to overspend.  If we fear money – or the lack of it – we are unlikely to save it or make investments with it.   

We need to be aware of the ways we respond to money and the ways that those responses shape the ways we deal with money.  Some financial experts recommend that clients keep money journals, in which they record their money hopes, their money fears, and their responses to spending and money.   A money journal can help you by showing you how feel about spending and about money.  If you can isolate the emotions that influence how you spend money and how 

you make your money decisions; you will be well on your way towards fixing your financial problems.                                                                               

Tip #98: Don’t mix debt with emotion and stay aware of your emotions

It pays to separate your feelings of worth and your emotions from your finances, especially when you are trying to repair your credit.  Feeling self-pity, shame, fear, or sadness as you try to repair your credit score won’t help you.  Staying calm and professional as you deal with credit bureaus and financial professionals will help you. If you need to, keep telling yourself that your credit score is just an important number.  Keep it separate from yourself and your emotional state as far as possible. 

Bad credit can be emotionally trying, and boosting your credit can be daunting and difficult as well.  It is important that you keep track of your emotions during the process.  If you find yourself dwelling on your credit too much or if you find yourself severely depressed, seek help at once.  A credit problem is a fixable solution – do not let it become an emotional disaster for you. 

Tip #99: Get help if you need it

Do not be afraid to ask for help – financial or emotional – if you need it.  There are a number of wonderful organizations that can help you if a problem is causing your credit problems.  If you have credit problems due to compulsive overspending, for example, Overspenders Anonymous can be a great help.   

Tip #100: Learn to deal with collection agencies

 If you have bad credit, you will have to deal with collection agencies sooner or later, and these companies often present the most persistent and unpleasant problem for those with bad credit.

Collection agencies are basically companies that work on behalf of companies to try to recoup money that is owed.   

If you owe your credit card company a payment that has not been made in some time, your credit card company will eventually ask a collection agency to speak with you.  In many cases, collection agencies try to get money for their clients through phone calls. Some collection agencies are quite reasonable and will try to work with you. However, some will use threatening or harassing techniques – including verbal threats and daily phone calls – to try to get you to pay.  To prevent the stress that collection agencies can cause, learn to deal with collection agencies. 

You should always get the full name of whomever you speak with at a collection agency.  You should try to be honest about your ability to repay and try to work out a payment schedule or payment options.  If at any point you feel threatened or harassed, say so.  Hang up the phone if the collection agent persists and contact the company who is trying to recoup money from you directly.   

Note that the collection agency the company uses has been using is using abusive or upsetting language and ask to resolve the issue with someone at the company directly.  Get the name of the collection agency and report them – and the agent you spoke with – to the Better Business Bureau.  Refuse further calls from the collection agency and continue your communication with the creditor directly, noting each time the collection company contacts you with harassing or abusive calls.   

Unfortunately, some collection agencies feel that intimidation yields the best results and since most collection agencies work through telephoning, they feel that they can say whatever they like (including making personal and false accusations) in order to try to recoup money for their clients. There is no paper trail and few people harassed by the agencies take these companies to court.  

Some debtors feel so ashamed of their bad credit rating that they almost feel that they deserve the abuse.  Both views are completely wrong. A bad credit rating does not make you deserving of abuse.  Report collection agencies that offer harassment as a technique and make it clear to lenders that you will not work with a company that uses abuse as a technique of recouping money.   

Some collection agencies will try to use your credit score against you, telling you that they can ruin your credit score at a glance or file a claim on your credit score.  Don’t fall for this.  Your credit score is instantly affected when you fail to make a payment or are reported to a collection agency, but there is nothing that the collection agency employee can do to make your credit score worse beyond those two things.   

You will still be eligible for credit in many cases.  Do not let false claims about your credit score intimidate you into accepting the abuse of a collection agency. 

Tip #101: Keep at it

Credit repair is not something that you simply do once in a while when your credit rating slips below 620.  Credit repair and credit check-ups need to be part of your overall long-term financial plan.  You need to follow a regular maintenance schedule of checking your credit reports regularly (you can get one free credit report from each of the major credit bureaus every four months, which lets you check your credit for free three times a year).   

Regular check-ups will ensure that you have not been the victim of identity theft and will help you make sure that your credit has not begun to slip.  Catching errors and problems early can be an excellent long-term way to ensure that you never need intensive credit repair again.   

Your credit should be part of your financial goals because your credit can help you meet your goals.  Good credit can help make loans affordable, and so can help make education, homes, and cars possible.   

Your credit score will not stay steady – it may drop due to oversight or if you suddenly open some new loan accounts.  

Repair your credit, USA Credit Score

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