10 Ways To Boost Your Credit Score by Dave Czach
1. Deleting Errors in 48 Hours
This is
absolute fastest way to correct errors on your credit report and raise your credit score. However, it can only be done through a mortgage company or a bank. If you apply for a home loan and find errors on your credit report, request loan officer to conduct a Rapid Rescore. But don't mistake it for credit clinic tactic of multiple dispute letters.
The Rapid Rescore strategy requires proper paperwork. You need proof that item is incorrect. It must come from creditor directly. For example, a letter stating account is not your account, a letter stating account was paid satisfactorily, a release of lien, a satisfaction of judgment, a bankruptcy discharge, a letter for deletion of collection account or any relevant evidence.
This is same documentation a bank or mortgage company would require for credit accounts anyways. The difference is, now you can improve your credit score and receive a lower interest rate. The results are not guaranteed and will run you about $50 per account.
2. Deleting Negative Credit
This is infamous area where you've heard of all scams. Credit repair clinics charge "an arm and a leg" and promise a clean credit report. Sometimes even a new credit profile! People spending hundreds, or even thousands, of dollars for something they can do themselves.
Removing errors is simple. Deleting negative credit that is accurate requires advanced methods. But that is not scope of this report. So I'll focus on deleting negative errors.
Credit report errors easily disappear by using a simple dispute letter. If you have paperwork proving error as mentioned above in Rapid Rescore, send copies of that along with dispute letter. This will make credit bureau's job easier and you will get faster results.
If you don't have documentation to prove error(s), send dispute letter anyway. According to federal law, credit bureau's have a "reasonable time" to validate your claim. They will contact creditor for verification of your dispute. Then account will be reported accurately - or deleted. It has been generally accepted "reasonable time" to complete this task is 30 days.
If you're not do-it-yourself kind of person. Or don't have time. You could hire someone who is very economical.
3. PiggyBack Someone's Credit
This is a fast and great little credit score booster. But it requires a very trusting relationship. Simply put, someone else adds you to their credit account. For example, when applying for a credit card, you may have seen section to add a card holder. If your trusting person adds you, their payment history is now reported on your credit report too. If they have perfect credit, now you have a perfect account.
To make this more effective, use an aged account. Imagine if your trusted person has a 10 year old credit card account with a perfect payment history and a balance of only 50% of credit limit. Wouldn't you love to have this on your credit report? The easy part is your trusted person just calls credit card company and requests a form to add a cardholder. Once completed and activated, their entire account history and future is now firmly planted on your account. Imagine if you secured 3-5 of these accounts - especially installment accounts. Your credit score could sky-rocket!
The challenging part? Finding trusted person. Since you already have a low credit score and bad credit, how eager will someone be to make you a cardholder? Even your parents don't want you to damage their credit. But, no one says you need to possess card! In other words, your trusted person could add you as a card holder and never give you card or PIN or any information. Since bills and all account information is still mailed to trusted person's address, you won't know anything about account. This scenario could land you many trusted persons. And you still benefit with a higher credit score.
4. Playing Round Robin
This strategy is one of oldest credit building techniques around. It used to be accomplished with secured savings accounts. But now, it's much easier with secured credit cards. In fact, I've used this method myself.
Here's how it works: Take ,000 (or what you can afford) and get a secured credit card. Once received, get a cash advance of 70% of your credit limit. Get a second secured credit card. Once received, get a cash advance of 70% of your credit limit. Get a third secured credit card. Once received, get a cash advance of 70% of your credit limit.
Open a new checking account with final cash advance. Use this account only for making payments on your three new credit cards. If you make your payments on time every month, your credit score will increase because you now have three new perfect payment credit cards. (Initially, your credit score might drop a few points due to rapid, multiple accounts being opened. However, be patient because within 4 months of no new accounts or any delinquencies of any account, you will see your credit score increase. Mine increased 60 points in 60 days!!)
