It’s a new year already underway and like everyone else you’re thinking about all the areas of your life that you’d like to see improvement. If you don’t have excellent credit, then that should most certainly be one resolution that is at the top of your list.
Because excellent credit will have a huge impact on your finances and personal life. It’s no secret that almost every opportunity in America for financial security, success and status is in some way connected to your credit report.
Bad or mediocre credit can stop you from getting the things that are important to you and your family, but that doesn’t have to be your situation. I’d like to give you 6 fast and easy tactics you can use to improve your credit in 2018 so you can live a more abundant and prosperous life.
Pay your credit card balances to 10% of the limit or lower
Go through your credit report and make note of your credit cards with a balanceand pay them down to 10% of the limit or lower, if you can. This is important because your utilization ratio has a 30% impact on your credit score. By maintaining a low balance on your credit cards you’ll be eligible to receive an increase in your credit limit.
Some lenders have a tendency to just increase your limit if you manage your credit responsibly. But most credit grantors won’t, so I suggest you ask every 6 months. If you responsibly manage a $500 credit limit, you can easily turn that into a 20k limit in just a couple of years. By keeping high balances it not only lowers your score, but you indicate to the creditor that you can’t properly manage the credit you’ve been given and the chance of them raising your limit is very slim.
Request a creditor to remove a negative account in exchange for payment
A “pay to delete” is an effective method you can utilize in order to have negative information removed from your credit report. Ask the creditor, in writing, if they’ll remove the negative account in exchange for payment. Always be courteous and polite with your request, because that works best. Trust me, they have enough folks ready to throw them from a cliff.
Dispute old negative credit accounts
The statute of limitations for negative accounts to stay on a credit report is typically seven years, but bankruptcy and tax liens stay for 10 years. I recommend not waiting on the statute of limitations, because there are many cases in which negative information will stay on your credit report longer than the seven year statute of limitations. Let’s say you have 8 months remaining out of the 7, and you anticipate the account will be removed.
Don’t bank on the process to play out that way, because sometimes it doesn’t. Creditors are notorious for selling negative accounts to other creditors when the accounts are coming close to the statute of limitations. The new creditor that purchased the old account that’s close to expiring then places it on your credit as if it is a brand new debt. This process is called re-aging and should not be allowed, but unfortunately it happens. So don’t wait for the credit agencies to remove the account.
Ask the debt collector to validate the collection account
The Fair Credit Reporting Act gives you the right to ask a debt collector for proof of the debt before you make a payment. You have up to 30 days after receiving the initial written notice, to submit a written request asking the creditor to validate the debt. If the creditor can’t validate the debt, they can no longer pursue you and attempt to collect the debt and the account can no longer be reported to your credit. Third party debt collectors, better known as collection agencies, almost never possess the “proper” proof to legally collect the debt, so this works in your favor. Don’t be fooled or intimidated by a debt collector; you have rights, so exercise them.
Attempt a goodwill intervention with a creditor
Sending a “goodwill letter” can be an effective strategy for removing late payments from your credit report. If you’ve had a financial hardship due to personal issues like loss of job or divorce and your credit suffered, this is the perfect tactic. If the account is still active and you’ve made timely payments since your misfortune, a goodwill letter can work. When you send the letter to request the creditor remove the late payments, take responsibility and take a remorseful tone. The likelihood of the creditor removing your late payments increases significantly if you humble yourself.
Open new credit accounts
Your payment history has a 35% impact on your credit score. It is imperative that you maintain open revolving credit if you intend to maximize the increase of your score. Opening new accounts is the fastest way to raise your credit score, not by removing negative accounts. The revolving accounts you open must be managed responsibly, so maintain a low balance (10% or less) if you’re looking for a large increase in your score.
Don’t get me wrong, I don’t suggest that you excessively apply for credit. But I do suggest you have a minimum of three open revolving credit accounts. For more information about how to restore or build credit or get personal or business funding visit www.Leafcreditsolutions.com.