Although making a payment a few days late may just lead to another $30 bank charge, repaying a debt outside of the agreed payment cycle leads to about an 80 point score reduction. This can be the difference between a good credit rating and an excellent credit score. A series of quick credit repair tips can help that individual strive towards their goal of a 750+ score. Whilst paying back debt punctually helps to fix bad credit problems, many consumers are already doing this. There are often a number of less obvious reasons why a better credit rating isn't being achieved.
Turn a Good Credit Score Into an Excellent Credit Score Fast
Rapid credit repair isn't possible if it is the result of a breach of the contractual terms. However, a higher credit score can be achieved relatively quickly if due to too much debt, credit card balance distributions or erroneous data on a credit report. The following changes can help to rebuild credit and help a consumer to qualify for the most competitive credit card, loan and mortgage deals.
Correct Credit Report Errors for a Better Credit Score Rating
Disputing bad data is one of the most effective credit repair tips. Incorrect data will be interpreted the same way as bad credit. Provided the right supporting information is provided, the Fair Credit Reporting Act gives consumers the right to get any inaccurate information amended personally or through a credit repair attorney. Request a free report for Experian, Equifax and TransUnion and check each of them for errors. Look for wrong names, credit applications that were never made, lapsed debts (older than seven years) and debt that shows as "settled," "paid derogatory" or "paid charge-off" when they should read as "paid as agreed."
Improved Credit Distribution to Rebuild Credit Scores
- The maxing out of a card causes a 15 to 30 point fall. Always avoid using more than 30% of the allocated credit limit. Reducing this to 10% will lead to a higher credit rating.
- Spread revolving debt over several cards to help.
- Don't perform a balance transfer from an account with a high to a low limit. It gives the impression that someone is more financially stretched.
- Using an obsolete card occasionally will help build an excellent credit rating. Don't leave an old card in the draw.
- Closing old accounts will only help when minimal revolving debt exists.
Reduce Personal Debt for Quick Credit Repair
The amount of debt a consumer has compared to their disposable income is an important factor in determining a score. This is because people with a high income to debt ratio default on their agreements more often. In order to help build an excellent credit score, consider using savings to reduce high APR debt. A loan from friends and family will also help build a better credit score if it is used to clear a balance.
Credit Repair Tips for Improved Credit Ratings
The above suggestions can help with quick credit repair, but only if there aren't any serious transgressions. Defaults, delinquent accounts, debt solutions and bankruptcy will show on a credit report for a period of 7 years. In the case of personal bankruptcy, it will show for 10 years. There are ways to rebuild credit ratings when this is the case, but it will take longer to achieve a satisfactory outcome.
Asa Ghaffar - Asa has over 10 years of practical experience in loan approval, secured lending, bad credit repair, stock trading and debt management.
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