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Wednesday, June 13, 2007

5 Easy Steps to Improve Your Credit Score

When shopping a mortgage in San Diego, or anywhere, the first question will be ... "What's your FICO (credit score)? Mortgages are driven by credit scores. And with the Sub-Prime melt down, they are more important than ever. So what can you do??? Well there is the obvious, pay everything on time and keep your credit cards for a long time. History is important, timeliness is important and keeping your outstanding credit balances low is very important.

Here are the 5 easy steps to improve your credit score. None of these require much money, its more the effort here that will pay big dividends.

First and foremost:

1. Opt Out of unsolicited credit offers by calling 1-888-5 Opt Out.

Every time your credit is pulled you are charged a point or two. There are different rules for different types of pulls. But why have any unless YOU want them. By calling Opt Out, you do just that. You opt out of receiving ANY unsolicited credit offers for credit cards, mortgages, revolving charge cards, and any other form of credit. Any time you AUTHORIZE a credit check, no problem. But now you are in charge of your credit file.

Next you have to:

2. Purchase your Tri-Merged credit report at: and know your score.

How can you know where you are going, if you don't know where you are starting from. Get your credit report WITH the credit score. OK this will cost a few bucks. But now you know what you are fighting against.


3. Review your report and file a written challenge to every error.

Every credit report has errors. They are there, and they will cost you points until you challenge them and take them off. Or you can wait 7 to 10 years until the credit agency finally drops them. Hey, it isn't brain surgery. Just write them a letter and challenge them on the facts. Now remember, they just need to list the item accurately. So if your complaint is that the company failed to fix your product ... well the credit agency just won't care. That is not there job. But if the payment was made on time and they are WRONG listing it late, they have to investigate with the lender. If it is a public record and it was removed, or the lien was paid and your report is in error. Then tell them. Give them all the facts and ask for a response in 30 days. It's your right.

If they don't remove a mistake or error, then:

4. Repeat your challenges every month until they are gone.

Be the squeaky wheel!!!

Finally, and this is a big one:

5. Keep “used” credit to less than 50% of your available credit on each card and account.

This establishes your wise use of credit. Make sure each card is under 50% and that all cards combined stay under 50% (which should be true if you follow the first rule) and they will see thatt you know how to manage your credit.

Some other general items. Age of your history is important. Keep cards open a long time. Even with zero balances they show your long term credit management. Don't keep opening new cards just because you can. It looks desperate. And never, never, ever let a public record get filed. They put you into a higher risk category which remains even when they are paid off. So ... don't fight the IRS.

More tips at the web site:


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