The Flip Board

Folks -   This one will be very short and sweet. 

In order to qualify for better deals, you need a better credit score. Period.  Today, Flip Board readers will get a short “to do” list for cleaning up your credit file and upping your scores.  The techniques did work for me when I used them. As a matter of fact, I increased my lowest score (out of the three major bureaus - Equifax, Transunion, & Experian) 50 points in under 120 days!  No kidding…

Obviously, you must first get a copy of your credit report from all three agencies.

Use These Numbers to Order Reports:

• Equifax 1-800-685-1111 This one lets you get a free report if you have been denied credit in the last 60 days. Option 2. Make sure that you order only the credit report. Mail within 48 hours.
• TransUnion - 800-916-8800 - mail within 6 to 8 business days.
• Experian - 888-397-3742 - receive within 8 to 10 business days.

1. Letter writing campaign-  Once you check the accuracy of the report, highlight discrepancies and fallacies and note the creditor’s information. You can write a letter challenging each occurrence to the credit bureau. The credit bureau will challenge the creditor on its accuracy. If no correction is received from the creditor within 30 days of the credit bureau’s request, then the credit bureau will remove the discrepancy. Now, items can always be resubmitted by companies looking for payment, but, this method is very effective in quickly moving your score for a purchase you are about to make.

2. Pay your bills on time - I know this is a no-brainer. But, come on…. You wouldn’t be reading this if this was not an issue.  13 months of timely payments on a revolving account increases your score considerably.  13 is the magic number. If you are planning on acquiring a mortgage next year, pay your current mortgage or rent ON TIME for 13 months. Easy, right?

3. Close unused lines of credit - Having two Sears charge cards and four bank credit cards with $800 bucks open credit sounds good, right? I mean, you can get a bunch of credit, so that means you are credit worthy, right?  WRONG.  Many small (under $2500) lines of credit with little to no balances is a red flag for creditors. This tells them that when times get tough, you will spread debt across several accounts that can fill rather quickly.  Here’s what you do: On the OLDEST account you have, request a balance increase. An extra $500 bucks or more would be great. But take what you can get.  Next, close all of the little, unused accounts; especially the new ones (anything newer than 2 years). One should really never have more than 3 credit accounts anyway (IMHO)….

 4. Mortgages then Revolving… - Make sure your credit report is weighted accordingly. Your report should have more current mortgages and rent payments, then revolving lines of credit and finally retail or fixed payment accounts. The last set is where your one or two car payments or fixed interest, signature loans lie. The weights could be number of accounts or dollar amounts of each account. But they should fall in this order. Close accounts, payoff accounts and open new accounts until your credit report is organized like this.  And make sure you keep everything current and on time.

 5. Only 5 Inquiries per year - Constantly asking for credit triggers an “inquiry” on your report. An inquiry is simply a note that says an institution has pulled your report. Multiple notes in your report with no accompanying “new account” listed shows a desperate person, running around town trying to get credit. It looks very bad. For us real estate investors, we get inquiries all the time. But, multiple requests within a month looks like you are shopping around for the best deal. Spreading that out across 6 months looks desperate.  So, for real estate deals, it’s OK. But for personal credit, keep it to 5 attempts each year.  And let’s be honest, you know if your credit is crap before you walk into that store or sign onto American Express.com. If not, run your own report. That will not show up.