Things To Consider On Credit Limit Increase

Before calling your creditor to ask for a credit limit increase, you might want to see what your credit score is now. The higher your credit score, the higher your credit limit. However, if your credit score is on the low end, you can still be extended a higher limit by calling and asking for a credit limit increase.

It is helpful to add up a full line of credit limits on each line. The next step is to compare all of the balances on each card with the new limit. If the balances are close to the limit, the card gets an increase. If the balances are higher than the limit, the prompts for a card with a lower balance than the current one get an increase. Because there is competition between credit card companies to gain customers, they are most willing to extend lower balance limits on customers that are six months or more past due. Because the competition is so large, there is little cell phone carrier or credit card issuer that will ignore their increase.

Think of splitting the balance between two payments on a credit card can be an effective way to lower your payments. If you're one of those customer's that always pays their bill on time, take a look at the grace period on your card. Most cards offer 25-30 days to pay off a balance, without any interest charges. If you can pay off a portion of the balance every month, that's great. But if you have a small balance and you can only pay it off every month, consider how long it will take you if you pay the balance in full to pay down the balance. In that case, a credit limit increase might not help you!

If you have incurred a lot of debt and can't afford to pay the balance in full, try applying for a low balance, low interest credit card. By doing so, you can get the card with the lowest interest rate. Then, you can transfer the balance from the card of your highest interest card to that one and save the money you were paying on the interest on that card. If you were a first time credit card user and never before got a card with a low balance or with a huge credit limit, don't panic. There are credit card companies out there that target people with little or no credit. By applying for a card with a small credit limit and paying it off in a timely manner, your credit score might raise slightly.

CALCULATION CREDIT RATIOS

Usually the interest rate on a card will determine by the level of your credit score. The higher your credit score, the lower the interest rate you can expect. If your score is lower, you might have to apply and your application might be rejected. So first determine how much risk you want to take on, then plan how to pay if risk takes you. 15% or higher interest rate is typically considered the safe zone for a good credit card user. You are not going to get ripped off, but you have a low probability of being under the strict definition of a poor credit risk. Below 10% is also considered a solid credit risk. Lenders are willing to loan 8% on a credit card or 6% on a mortgage. The next level is below 10%. Getting a loan or credit card that is below 10% is difficult, but possible. For credit cards, 20% is the cut off. Most credit cards can be obtained below 20%. They range between 9% to 11%. Below this, range from 2 to 6% subjective. The last is below 2%. If you have a credit limit of under 2%, do any credit purchases at least twice a year. Not necessary, but you do not want to get caught in the sub prime market for a sub prime loan. Some sub prime lenders do not pay more than 2% and they are very rare.

Check your credit report regularly. You may notice errors. If they are removed, your score should raise dramatically. If they remain, the possibility is no improvement at no cost.

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What To Know About Credit Scores

What Is A Credit Score

Some people do not know what a credit score is. This score can affect how much money they can get and at what rate. Individuals who have a high credit score will be offered lower rates and may find an easier time getting financing. However, what exactly a credit score is used to determine credit risk is not all the information you need to know. Let's start off by understanding what it is and how it is used. Credit scores are used by lending agencies and selected lenders to determine how well an individual consumer repayment of debt based on their past credit history or credit habits.

Credit Scores vs FICO

One major confusion that consumers have is between a credit score and a FICO score. The term is actually derived from the name of the company that the Fair Isaac Company produced the product for. The FICO score makes up a part of a bigger picture. Lenders assume that they can get a fair estimate of the risk worthiness of a borrower based on the FICO score and higher the FICO score, the lesser the risk. This means that a borrower with a high credit score is likely to not only pay back their debts on time but will not default on default debt. Higher FICO scores would benefit those seeking a longer repayment period and lower interest rates.

Why Credit Scores Matter

In general terms, credit scores are important when it comes to getting the loan. Although one of the most important steps in one's financial life, many individuals do not have a clue about how banks and lenders evaluate credit. They do not know the full extent of the facts about credit such as:

• The credit score hint of stage the credit history
• The reporting of each credit
• How much of the credit is actually positive debt
• And percentage of debt that can be carried off with payments
  

If the credit report is not so great, the total score is lower than normal. So even if the individual has a negative credit report, such as a bankruptcy or foreclosure, he or she may be more likely to receive a loan than someone whose credit is less than perfect but the best of the group or the individual has great credit.

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Major Steps To Repair Your Credit

There are many things that you can do to repair your credit rating and help you qualify for better terms. Nevertheless, if you are unable to pay your bills or meet current commitments, you may be advised to leave bankruptcy as your last resort. To repair your credit is a step toward making a new life for yourself and your family, and the sooner that you begin, the sooner your credit will begin to improve.

One of the first and most important steps that you can take is to obtain a current and updated copy of your report. There are agencies who can obtain your report for free once per year. If you have not taken advantage of this in the past, it is a simple process to obtain your report online. Once you have received your report, look for any inaccuracies. If you find inaccuracies, contact the agency and ask that they investigate it and make appropriate corrections. If you find information on your report that is true, you can add a note of explanation and/or dispute the false information. The agency must investigate your disputed information and report back to you within 30 days. If they find the information is in fact true, it will remain on your report. You will be notified by mail of the results of their investigation. The next step to repairing your credit is to pay any outstanding bills that are past due. A late payment can remain on your report for up to seven years. An unpaid bill can also affect your credit report for up to 10 years. It is important to contact all creditors and attempt to negotiate a deal with them rather than paying late. If you are unable to make a deal, you should contact the credit agencies and request that they remove late payments from your report. While no creditor wants to, you may have to negotiate a deal so that you can pay off a bill. While most creditors will remove a late payment if you ask them, it is up to you to remind them.

It is important to obtain a current copy of your credit report and look over it for any inaccuracies. If there are any inaccuracies, you should identify them to the credit agency and request that they correct these errors. It is important for your credit rating to look as good as possible so that you are not limited with credit and may be able to purchase a newer vehicle or a house. If you have less than perfect credit, there are steps that you can take to repair your credit over time. By consistently trying to pay off current debts, making yourself late on payments, or even missing one payment, you should be able to repair your credit over time.

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3 Ideas For Using Credit Report

Credit reports contain plenty of information about your identity and financial history. Financial lenders look at them when giving out loans, but landlords and even employers use them sometimes. Fortunately, you can obtain a free copy of your report once a year. Use this report to check your financial history for accuracy and protect against identity theft. If you need additional credit reports, request them online, over the phone, or through the mail. Additional reports require you to pay a small fee in most cases, but your credit is worth keeping a close eye on.

One good thing to do is to check your report before you make large purchases. If you're planning to buy a car, a house, or get insurance, it's a good idea to do this before applying for credit. It's a simple matter of waiting until after the loan is approved to check the report to make sure there are no problems. Otherwise, you may have trouble finding a lender who does want to give you credit.

Another good idea is for identity thieves to pretend to be you and apply for credit in your name. If you have an existing loan, it's a good idea to add a fraud alert to your credit report. You will notify anyone who checks your report and the identifying information will not appear on your loan. This protects against identity theft if you're not expecting it.

Recently added is the requirement for companies to notify you if a choice regarding a certain product or service involves credit. When a company denies you a particular service, eligibility, or charge on a product or service, the company should include a toll-free phone number for you to contact them for your refund.

Checking your credit report on a regular basis will help you make sure there's no errors. This is the watchdog of your financial peace of mind, especially if you're about to make a big purchase. If you find an error on your report, investigate the problem and do what's necessary to correct it.

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How to Get Debt Help

Debt help is available, you just need to know where to look for the help, or who to ask for help. If you are in serious debt, then seeking some debt help is a must. Debt problems can cause you to lose sleep, feel your life going in a downward spiral and it may even affect your job and private life. It should not be taken lightly how to get help for debt problems, you should inquire as much as you can learn before attempting to resolve your financial issues. While it is true that settlements can be a good solution for some, they often leave you with a diminished credit report. Settlements can also take a while, months or even years to pay off, you do not want that to happen with your credit. Keep in mind that with any type of debt help solution, that you will have to pay your debt on time in order to improve your credit. Paying on time can only improve your situation and bring your overall credit score down.

One of the the best ways to get some debt help and eliminate debt is by researching what is the best solution for you and your situation. First, do you have a hardship? If you had a demanding job or have a medical condition that requires excessive medical bills, then it might be a good option. With the economy the way it is and the unemployment rate going up, a lot of people are in a situation where asking for more money in order to pay bills is just a matter of asking for trouble. Second, will you actually be able to pay your debts off? Those who need the "easy way" will be unable to cut their spending in order to make extra payments on their mortgage, car loan or credit cards. If you have already pulled your credit report and are finding that you are already in credit trouble, chances are you will not be approved for any type of debt help.

Thinking about debt alone may help someone feel better but it will not solve your problem. Taking that first step could be the toughest one, but once you have done it, it will be easier for you the next time. Debt may just be something you have to live with these days, but if you can't afford the things you need, like a home, car or medical condition, it can cause you to be under stress. While you are preoccupied with problems surrounding debt, you need to do something about it and take some precaution to protect your future. Just knowing that you could have solved the problem on your own may not be enough to keep you from considering how to get debt help.

If you are like most, you need some debt help. One of the best solutions for your financial trouble is to get a practice debt management program. These are excellent ways to get a handle on your finances and learn how to make good financial decisions. Some programs will even teach you how to make extra payments toward your debt. Like anything every endeavor you want to get ahead of the game by practicing some financial wisdom, and the steps to debt management can help you teach yourself. By offering you more credit knowledge, credit counselors start you off in debit planning, and then teach you how to make accelerated payments and consolidate your debt with a debt consolidation loan.

We all have to be on top of our payments; stable jobs and credit scores depend on it. Get a trade line, go for debt management instead of a settlement and start on the road to financial freedom through debt relief.

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Credit Risks for Businesses

Unlike consumer credit reports, business credit reports are gauged by a depressed set of parameters, producing what the industry refers to as a tri-partite score. Perhaps easier to understand is the relationship between a company's credit risk and the type of industry it is in. The more credit-worthy and stable a company is, the easier it is to get credit lines, and the higher the financing potential. That is why companies are more attracted to growing companies that are stable. It’s one reason that the largest businesses in the world often take on dependable clients, and other more techie companies can be less affected. However, a different type of company with different industry and financial nuances can produce totally different results. Even the most credit-worthy companies can have credit risk that's much higher than most others. If most firms in the market are stable, credit risks within those companies are stable too. That makes getting credit lines with many companies in the same industry somewhat difficult. On the other hand, borrowers with the right type of credit risk can receive credit lines and other types of financing that they’re never had before. That, when using a entrepreneur credit risk, is a new transaction on an otherwise established industry.

One of the primary contributors to a company’s credit risk is the competition the firm may face from other firms from outside of the equity holder community. Over the long term, credit risk depends on the stability and projected growth of a company rather than the strength of it’s core competitors. Many investors insist that maintaining strong competitors helps to protect the market, and so keeping challenging new products or the entire company in the market is a good idea. As an example, if bulk buyers, subcontractors like wrongful death repairs, and contractors like concrete and landscaping companies stay in business and compete fairly, credit risk should be lower because even if all of these firms were to fail, their competitors would not likely go bankrupt. On the other hand, if the core of the company goes down, without the new buys coming in to replace these services, the remaining companies might not even be able to pay their bills. In other words, despite all of these risks, if a company had a new product that was a well-established product like fax machine design, it might even be able to rely on advertising and new product introductions to gain new revenues. These new revenue trends can offset the downs in the core of the company. So a more stable company with a more diversified core of services can be safer, because profits can still come in even for the less stable companies.

With credit risk as important as it is, there are several steps that businesses can take to mitigate the risk. Most important is credit evaluation, which solicit your business credit report to determine what your business credit rating is. That report provides the numbers for your risks. But what are your credit risks?

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How Can You Eliminate Credit Card Debt

A lot of people have the belief that if you eliminate your loans, you will not face any repayment problems later. Well, that is not the case. Getting a secured loan is easy but not when it comes to unsecured loans. If you do not agree to provide a security to the lender, he will not give lot of loans. However, this is not the right approach because you will be paying more interest even if you are getting a secured loan. At present, most people seek a settlement to eliminate credit card debt and to get a valued sum. People have heard a lot about what is debt negotiation and how it is helpful in fighting unsecured liability problems. What they find difficult is how to eliminate credit card debt quickly.

Well the first step is a settlement for which you can hire a professional company. In other words, you should not confuse relief with elimination. Even if the company is legal, chances are that it will not eliminate the principal amount. This is because a firm which talks of getting an elimination is not experienced enough to do it. Now let's have a look at the process.

Debt negotiation is based on the communication. You select a firm which communicate on your terms and conditions and discuss all the important factors with you. The communication is very important and the unpaid amount is just one part of the terms and conditions. This paper work is prepared after the negotiation process. The details of the transactions, the cases and the handed over details from the bank management are also included. The process of credit card reduction is very simple if you have hired a professional firm. The following factors can result in further increase of the payable amount or can give you a better settlement deal. These are the efforts made by the management after a credit card reduction.

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Filing For Bankruptcy

There are many reasons why people file for bankruptcy. Some may be due to mortgage loans that go into default; others may be for medical bills that cannot be paid and some may be due to no or insufficient income to pay back accumulated debts. Whatever the reason you have taken out loans, there is a way that you can lower your debts by filing for bankruptcy. Contrary to what you may have heard, bankruptcy cannot help you immediately clear your debts; however, it can make you free of them without having to pay them back in full. There are two basic ways of achieving this. The first way is a debt consolidation loan, which by consolidating your debts allows you to pay them back at lower interest rates or with lower monthly payments. You are also given a period of time to pay back this equity release loan like regular obligations. After you have paid back your loans you would have a certain amount of equity in your home, which would leave you to pay off the consolidated debt. Another way that you can lower your debt is by filing for bankruptcy. You will need to disclose all of your debts as well as the money that you have that you can pay back and the property that you have within the bankruptcy. If you have a reasonably large amount of equity within your home, filing for bankruptcy may be the only way to get rid of these debts. Every state has its own rules, but some states will require mortgage lenders to keep their priority status. Some states will eliminate these taxes and other demands, but this may vary.

In order to file for bankruptcy you must first file with the state in which you reside. Since so many people are filing for bankruptcy every year there are different rules in place for different states. This means that the rules for bankruptcy for every state are different. This is why you will need to hire the quality attorney that will represent you to help you through this process. They will help you to list all of your debts. The attorney will also help you to decide which ones are unsecured and which ones are secured. Unsecured debts include things such as credit cards and medical bills. Secured debts include home mortgages and car loans and these cannot be cleared through any form of debt relief. Once you file a petition you will soon be receiving a statement of your case. The statement will give you more information about how the case will proceed and when it will be resolved. After the debts that you cannot pay are cleared you will be required to complete a repayment plan that you and your attorney will work out. Once the repayment plan has been completed a discharge will be released, and payments can be made toward the balance of the debts, or removed entirely.

Filing for bankruptcy is a very stressful and difficult time. You may find that you have to delay eliminating this debt, so don't get yourself into that kind of problem. Talk to your lawyer about how to resolve your financial difficulties so that you can get your life back on track. By doing so you will get rid of your debt and get yourself back on the road toward financial stability.

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How Credit Bureaus Work

The credit bureaus are for information only. They are not responsible for judicial decisions, criminal proceedings, or employment decisions. The agencies cannot talk to you about anything but their reports. If you feel that something is not right, or if you have been the victim of identity theft, you can contact one of the agencies to report it. Then the proper authorities will discuss the problem with the lender. One of the most important aspects you should know is that the agencies do not share information with each other regarding your credit status. Lenders and the credit bureaus do not normally talk about your credit history with each other.  If you have a professional and believable credit reputation, and if you have been paying your bills on time, then this information is probably not of your problem. But, if you have a bad credit record, then information like that stays in your credit file whether you want it to or not.

Yet, there are many errors made on credit reports every day. There may be mistakes that results in a person's credit score being reduced. Maybe this reduction makes it impossible to get the type of credit or loan you want. Lenders and credit bureaus are unlikely to correct this unless the lender and the credit bureau have proof and only if they are disciplined enough. Unfortunately, there is no proof when it comes to smaller claims such as your credit score being downgraded due to errors discovered in a late payment on your report or a charge-off. Official government regulations do not have the same rules as credit reports, and the lender would have absolutely no way to prove the information in your report was true. Until the lender proves the information is true through legal means, and unless a Fair Credit Reporting Act (FCRA) case is opened, then the reduction of your credit score can be opened for potential discrimination and bias if it is perceived that you are not responsible with your bills.

Credit reports play a big role in your financial life, and you have a right to know what is on your report. See what information is being distributed about you on a daily basis. The right to know is one of the main reasons that consumers are more likely to demand a credit report to ensure their privacy. If you have been subjected to discrimination in favor of a negative judgment, or have been the victim of identity theft, then you do have the right to know what information is on your report.

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Important Things To Know About Credit Cards For Small Business Owners

Many credit unions and banks offer business cards which are designed to help small businesses. They can provide valuable resources and valuable leisure activities for small businesses. A card also provides other economic benefits too. If you are a business owner, you may want to obtain a credit card with no annual service fee. Unfortunately, it is not easy to obtain a card with no annual service fee.You will need to spend time finding one that does not. You will also need to locate companies that offer cards with no annual service fee. You may find that the card does have additional benefits for small business owners like cash back and rewards that can be applied to existing balances. Some cards require that a business owner has an existing credit card account balance. It is suggested that you have at least 50% of your credit line available on this card. You should also not take your business expenses on the card as it will affect your personal credit. You are uncertain to know if you will need this credit limit. It is suggested that you contact a small business consultant or a bank with your concerns. If you want to have a multiple card account, you must be careful with credit lines and do it in a careful manner. Once the bank has approved your application for a small business card, you can begin the process of establishing credit lines. It is important to note that for two years you are not required to pay a fee if you do not have an annual service contract.

There are many excellent companies that offer credit cards which are not likely to work for your small business as it revolves around the company's size. It is very important to understand that though a different mix of card professionals may result in a credit card with no annual service fee and perhaps even low deposit and annual service fee that is beneficial and appropriate for your business needs. As a small business owner, you must be tenacious. You must plan ahead and budget carefully as you always need to make sure that you can pay on time. Because if you were busy or forgot to pay or were caught in a situation that would have affected your timely financial payments, you could find yourself in a financial bind.

Many banks and credit card firms dispute that small business owners with poor credit can establish cards for their businesses. However, many small business owners with poor credit have obtained and are using credit cards for their businesses. There are two types of small business credit cards that can assist you when your personal credit rating is less than perfect. One is known as a "bad credit" cards and a second is called a "good credit" credit card. As the name implies, the bad credit cards are generally reserved for those who do not have the credit rating or high credit score that occurs with the very best credit cards.

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Tips To Raise Your Credit Rating

High credit scores make your loan or credit card application, shorter payback period, higher rates, and lesser hassles. FICO scores are determined by a number of factors, such as payment history, amounts owed, age of credit, and credit types in use - like installment loans, and revolving lines of credit.  The amount owed on each of your outstanding debts is also taken into account.  Late payments, non payments, bankruptcies, judgments, and other negative factors will all affect your credit score. Because your score determines how well you handle debt, pay off your credit score will benefit you.

To raise your credit rating you need to have credit, but incorrect or unfavorable reports also aren't necessarily a bad thing, as long as they don't reflect their conclusions on your credit. If your reports are correct - and the data has been made available to the reporting agencies - then you really can't do anything about inaccuracies unless you know about them yourself. Go over each entry in your credit report, find out which factors are harmful and which are helpful, at a minimum each month to monitor your growth. If you find inaccuracies or complete errors in your credit report, contact your creditor immediately. Explain the errors and how they came about. If any disputes occur, be sure to get all agreements in writing. There are drawbacks to this approach, as the corrections will not go into your regular numerical credit score, nor will not affect your score as greatly should others identical errors be made. Credit reporting agencies are under a duty to the original creditor to provide to the reporting agencies an accurate credit score. Remember, in order to do so, they need to know your full credit information and they need to complete that process. Remember this had been done properly, so it wasn't necessary for your credit score to be hurt with wrong information.

Never blindly accept information contained in the credit report. It could be possible that there is information in one report that is completely false and inaccurate. You can obtain your free annual credit report from each of the three reporting agencies, annually. Make certain that you take advantage of the new account function or you may not be able to practice leverage, if you ever have a dispute with your report. Otherwise, take responsibility for managing your credit right now, and by monitoring your report, it could help you maintain a high score at all times! Take a long hard look, at the balances, and--if necessary--learn to manage your credit balances correctly. Learn the strengths and weaknesses in your credit report. Be sure to make payments on time, every time. Don't carry a high balance or pay unnecessary interest, and understand fully what you're getting into through this credit agreement.

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How To Maintain A Good Credit Score

 

Did you know that you are entitled to one free credit report annually? It's true! Reporting agencies are required by law to allow you to check your credit report free of charge. You can access the report right on the website of the federal government. In addition to the free report for you, be aware that reporting agencies are also required to give you a free report if a company denies you credit, insurance, or employment because of it. You're also entitled to a free report if you're unemployed and plan to look for a job within sixty days.

Knowing your credit score is important. The credit scores range from 300-850, with 300 being extremely poor and 850 being the "maker's" dream. If your credit score is low, you can get your score increased. Pay all of your bills on time, every time. This is a slow, but effective way to increase your score. If you have late payments that happened because you just ran out of money, then contact the creditor and explain the situation. If you have paid off a bill, and then it starts costing you more money because of fees, then contact the creditor and ask for a reduction in the fees. No company with any integrity would negotiate if they didn't think you were going to pay. If you have a strong payment history, that means more money in your bank account. Pay all of your bills, on time and without fail.

Keep an eye out for identity theft, especially if you are making online purchases, shopping on a website without verifying the site, or using your credit card for the purchases. As long as you don't store personal information on your computer, then you aren't at risk. If you do decide to use your credit card on a website that's not secure, then be sure that you have adequate protection in place. The low-tech versions of signal interfering and tracking devices are beginning to show up as well.

Monitor your credit reports every year. Make sure that your identity information is not being used on other websites so that others can steal your information. If there are errors, erroneous items, or identity theft, notify the credit agencies right away. If you have cheat services introduced into your account, work with the consumer protection office to get the items verified.

Additionally, if you have constantly been denied credit, insurance, or employment because of your credit report, contact the agencies and ask for those items in writing. It's better for you to be proactive. If you are being turned down for credit, insurance, or employment because of something you know that the creditor doesn't know, contact the three major credit reporting agencies right away!

Keep lists of your credit cards and their balances, credit limits, and interest rates. Keep these items updated each month. If you remember to make a payment, then do it. If you forget to make a payment, make sure it continues to come in. Remember bankruptcy is an option, if it's been sent to you. Be sure to have copies of this letter sent to all three credit reporting agencies, along with copies of documentation showing your efforts to rectify the situation. If you have not been able to achieve favorable credit results, it may be time to switch careers and get a job making people pay.

Determine your debt ratio. This is simply the difference between the amount of credit you have used and the amount of credit it would take to pay off the loan. If a Visa card has a $10,000 limit and you have actually used $9,000, there are naturally going to be a lot of inquiries from other people who want to use your good credit. This creates a high debt-to-income ratio. The goal is to keep it below 35%. If your debt ratios get above 60%, then it's time to start using credit wisely.

Paying your bills right side of the table is the secret to keeping your credit score high. If you're charging more than about 10% of your credit limit, or by 50%, take measures to reduce the amount of debt owed. Smart employed individuals are never late, but they also never over pay. They should never max out their credit cards because they know they will never overpay. Waiting for the bill to arrive doesn't have to be a stressful situation. It's critical to keep interest rates low, but their is a need to respect their repercussions.

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Credit Score Basics

About 10% of the companies that give auto insurance have a higher rate for those consumers with higher FICO credit scores (which are arrived at using the information in your credit report) than for those with lower scores. There is no national credit score, just individual credit scores from each credit bureau or institution.

FICO scores calculate credit information from the following areas of your credit: payment history, amounts owed, length of credit history, new credit and types of credit used. The weight of each factor will depend on the information contained in your credit report, so understanding how each factor affects your score is important.

Your payment history accounts for 35% of your score. This includes accounts that are current, accounts that are paid as agreed, accounts that were referred by a lender, and accounts that were sent to a collection agency. Late payments will lower your score. Your most recent history counts for 30% of your score. It includes accounts sent to collections, accounts referred to a collection agency, accounts the company no longer keeps, and the age of your accounts. Inquiries for new credit accounts for 10%. The amount of a person's average annual Inquiries count for 10%. The number of recent credit applications counts for 10%. The amount of credit used is calculated based on how much available credit you have and what type of credit is used. The percentage of your revolving loan portfolio used is used in the calculation of your credit score (10%). The second largest amount of your score is based on your debt to available credit ratio. The total amount you owe on all of your accounts, and the proportion of your installment loans versus your available credit is used in the calculation of your credit score (10%). Additionally, two other pieces of information can affect your credit score. The average length of time accounts have been open, and the number of recently opened accounts can affect your score negatively if there are too many in a short period of time. The most common mistake people make when filing a dispute about a negative item on their credit report is to contest that all negative information is inaccurate. In most cases, this is not the case, and the negative item can stand, so these should not be disputed every time you receive your credit report and notice negative information. Better to focus on the negative accounts that affect your score the most, and have the most impact on your credit score.

The dispute process is entirely differ from the process of repairing bad credit. When you repair your credit, you are essentially asking the Credit Bureaus (the agencies that maintain on your credit report throughout their investigation) to verify information with the creditor. On the other hand, when you seek the creditor's adjustment or deletion of a negative account, you are asking the creditor to verify the information with the credit bureaus. They have much additional power with the creditor than a credit repair company. Moreover, creditors have the constraint to verify information in their possession, whereas they are not required to do so under the dispute process. These factors make the process of repairing your credit far more forgiving and effective. It can be a true "saint's savior" in many cases.

From what I've seen, the overall process for repairing your credit takes 18-24 months. This is a much better track record than trying to fix your credit for the next five years or longer. With so many people falling victim to bad credit, there is tremendous pressure on these companies and the credit bureaus. People are coming to them with a lot of stakes. Because of this, more consumers are seeing the credit repair path as a viable option to fix what is damaged on their report. Good credit is more vital today than it has been at any other time in history.

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How To Fix Bad Credit Score

Check credit reports

When was the last time you got a copy of your credit report? It's absolutely free to everyone once a year, so why not amend any errors that may be keeping your credit score down? It only costs a few bucks, and the sooner you get it, the better.

Check for inaccuracies

Over one in three credit reports have inaccurate information, including items that should be still on your report and items that should have been removed. Finding items like this can be slightly difficult, but if you follow these steps, you will be able to get them fixed in a matter of minutes.

Pull out your credit card report

Do you know what your credit card balances are? If you do not, then you need to pull all of them out and take them out one at a time. You would be amazed at how many are out there, so if you do not take these out and focus on getting rid of that number, your credit rating will improve.

Don't max out your credit cards

Many people who have problem with their spending choose to take out one or two credit cards to help themselves curb expenses. They understand how interest works, so they avoid charging over half the credit line each month but cap it at 20%. This is a good way to avoid maxing out a card and thus getting yourself into a high balance.

Don't close old card accounts

When you close an old account, it will look like you are not dependable with your finances. When you close a card, it also lowers your total available credit, so if you have a total available of $40,000 and have a credit card with a balance of $25,000, you'll take on $15,000 a year in credit card balance as you stop making payments on it. Keep these close to your desk for emergency, but make sure they stay open and enjoy them for that extra cash each month.

Settle up with old creditors

If you owe money to a bank or credit card company and are behind in your payments, try calling them up and asking to make a settlement such as a lower interest rate on payments, waiving the monthly payment a couple of times, or setting up a payment plan. Earn their trust again and work out a payment plan before paying a cent.

Don't risk it with new credit

If you are thinking about getting an equity line of credit, make sure you don't confuse a line of credit with a personal loan. While the terms will be similar (the main difference being that a line of credit will allow you to "step up" your payments as you use the equity line) the costs are generally a lot higher. If you need a car, get a secured personal loan and pay off your credit cards.

What are your options for fixing a bad credit score? These are just a few of them, and they will all add to the overall cost of having bad credit.

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