2 Things To Do In 30min To Raise Your Credit Scores 40-100 Points

Let me start off by saying that understanding how the three major credit bureaus arrive at your credit score is one of the most powerful pieces of knowledge you can have. Most likely this is not something that you have ever been taught. In fact, when it comes to your credit scores, the three major credit bureaus, Equifax, Experian, and Transunion, run sort of a "black box" operation.

Now I will keep it simple and explain how your credit scores are calculated...

Payment History 35%: This is the largest contributing factor for your credit scores and represents your history of making payments with your creditors.

Utilization of Credit 30%: This represents the percentage of available credit against the amount used. Here is where we will focus our activity for this article.

Credit History 15%: A more seasoned account carry more weight than one that was just opened.

Recent Inquiries 10%: Whenever you apply for any kind of credit, a credit inquiry is reported. Too many of these, and they can negatively effect your scores.

Credit Types In Use 10%: The number of accounts in use, and the type of credit accounts. Finance company accounts are of the lowest value, and too many of them can cause a negative effect on your scores.

Now that we have a little knowledge under our belts, here are the 2 things you can do in the next 30 minutes to gain some points very quickly

Get an increased credit limit. This is very simple to do, and I think you will be pleasantly suprised by the success rate if you just make a couple easy phone calls. Just pick up the phone and ask to raise your credit limit. Now you can also use my favorite strategy and say something like, "I am considering a balance transfer to another card with a higher limit and better interest rate, but thought I would see first if you would increase my limit and possibly lower my interest before I cancel this card.". I have found this to be successfull nearly all the time, both personally as well as with my clients.

Here is an example of what can be achieved. You have a credit card with a balance of $4,000 and a limit of $5,000. This means you are 80% utilized. After using the above technique, your limit is raised to $6,500. Now you are only 62% utilized. Immediately your credit scores have increased. Keep in mind that we want to ideally keep our balances at 50% or lower compared to our credit limits. This segways to the next tip.

Lowering your balances to add more points. Continued from the above example, you are now utilized at 62% on your credit card. What this means is that you still have room to further increase your scores. If you coule put just $750 on this credit card, you could bring the current balance to 50% of your new credit limit ($6,500 credit limit, with a balance of $3,250). You might be saying that you don't have $750 to put down on your credit card. Ok, you could stop right here, since you already increased your scores, and you can most likely get the limit raised for all your credit card accounts. However, if you are trying to buy a home, or a new car, you can potentially save thousands, or even tens of thousands in interest on that new loan and even get a lower monthly payment, just by paying a little down on your current accounts. When that results in higher credit scores, you may qualify for much better loan terms. In one case, a client paid down $450 on one credit card and was able to increase their scores so they could purchase their new home with zero down, instead of the $5,200 required down payment they were previously facing.

These are very powerful techniques. I have seen this work for clients time and time again. One client recently was able to raise the credit limits on 3 credit card accounts and raise their scores by 105 points immediately.

These simple tactics are more appropriate for someone with a good payment history on established credit card accounts. It is recommended that you have at least 3 open credit card accounts to maximize your scores. One of these could be a department store account. If you don't have enough credit, or have a negative credit history, perhaps more aggressive credit repair or credit building strategies would be more appropriate for you.

Article Source: http://www.myaddirectory.com

Jon Ochs has over 12 years of experience in the credit and debt field and is the founder/CEO of NCA Credit Repair, a highly respected credit repair services company.

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