when economies are experiencing difficulties and losses due to
default are no longer acceptable. No matter what your credit
situation may be knowing where you stand soon rather than later will
save you money and time. You will find tips for getting your credit in
1. Get a copy of your credit reports. You need to know what's going
on now so you can start planning a strategy for repair. Free credit
reports are available to you at www.annualcreditreport.com. This
website is the official site you can get your free report from all three
credit bureaus yearly. You have to pay to access your scores.
2. Dispute any mistakes on your credit report. You can do this
online at www.annualcreditreport.com. Common mistakes you might
find are old accounts you paid off that still show up as owing a
balance, a family member's credit getting mixed up with yours, and
double reports for one line of credit. Receipts or letters from these
creditors will help you out tremendously in getting these items
removed. When disputing the items you must dispute the item with
the credit bureau. Calling the company that put it there will not
accomplish anything. The credit bureau will request proof of the
debt with the reporting company and if there is no response after 30
days the item will be removed.
3. Pay off judgments. Judgments are different from collections. If
you have a court order to pay money, this problem will not go away
for up to 20 years in Texas. Consider paying off new collections
less than one year old. These collections are still hurting your
score, and paying them off often improves your score. Get up to
date on child support and have it automatically drafted from your
paycheck or bank account. Get up to date on Federal student loans
you owe. Your first chance of getting a loan may be FHA which is a
loan backed by the Federal Government.
If you owe money to the IRS for back taxes, work out a payment plan
with automatic draft. All of these items listed are very big red flags
that will stop you from getting a loan. You must deal with them. The
amount you owe makes up 30% of your score.
4. Pay your bills on time. This makes up 35% of your credit score.
5. Do not cancel accounts. Many people make the mistake of
canceling credit cards thinking it will make their score go up.
Closing the accounts makes your credit history appear shorter or
"younger" than it actually is. Your length of credit history makes up
15% of your score.
6.If you have little or no credit, opening a few lines of credit now is
important for establishing your history. A personal loan, store card
and a credit card is a good place to start. You may have to make a
deposit with a bank to obtain a personal loan or secure credit card.
The types of credit you have makes up 10% of your score.
7. After you have a good mix of credit lines avoid opening new credit
lines. Applying for multiple store cards when pressured at the
register will only bring your score down. New lines of credit in the
past 6 months makes you look desperate for credit. This makes up
10% of your score.
8. Open a savings account. At the very least start making small
deposits. Having a history of savings will signal responsibility to
lenders and make it easier to obtain new credit later on.
9. Consider joining free credit watch programs from your bank or
credit card companies. They can alert you to any changes in your
credit and help you avoid loosing valuable points.
10. Do not be afraid to ask for help. If you are considering getting
outside help, check with the Federal Trade Commission at www.ftc.
gov. They can help you spot reputable credit repair companies that
will help you repair or improve your credit for a fee.
Further credit repair tips and programs for helping you budget extra
money will be discussed at my free monthly home buyers class. Call
(210) 260-6617 or e-mail at firstname.lastname@example.org for time