Tips and Tricks To Boost Your Current FICO Credit Score!

Much of your trouble may be self inflicted. It’s natural.  The key to this is admit how you got here. If your spending habits are out of control or if your credit has been damaged through no fault of your own, face it and get to work fixing your credit. Right now, though, you need to vow to never get yourself back in the same situation after you repair your credit.

First things first. Get your credit report.  In fact, get one from all three of the major credit bureaus: Experian, TransUnion, and Equifax.  By law, you can get one free every year but then you’ll probably have to pay around $10 a piece for each of the other two credit reports.  It’s very important to get reports from all three credit bureaus so that you have a complete picture of your credit history.

Here is a secret: Each credit bureau compiles its own report on your credit history with a different FICO score! So, in effect, you have three credit reports with three different FICO scores based on what's in those reports. You need to know that false information can be affecting your score in one or more of the reports so you need to see all three.

Some  credit card companies only report to one of the three bureaus.  Very few report to all three.  You can see why, if you are determined to repair your credit, you need all three so that you don’t miss anything. 

Next, pick apart those credit reports carefully. You are looking for errors such as a bill you paid in full but that is still being shown with a balance. Also make sure that the bills shown on your report are actually bills you made. I once had a credit card shown on one report under the name of someone in Phoenix, Arizona! He had the same name but a different Social Security number. It took a little work to get it straightened out.

You see, people at credit bureaus are human too and make mistakes just like us!  If you don’t object to these mistakes, they are ignored because everything is computerized. No humans check the validity of data being recorded, they just key it in. These kinds of mistakes can drive down your FICO credit score! 

Once you have cleared any errors, focus on your accounts that are behind. You are going to develop a sensible re-payment plan and sell it to the lender. I know, most people hate this idea because they feel they must humble themselves. That's not the case at all. If you approach creditors with a positive attitude, most will work with you.

Now, assuming you are not declaring bankruptcy, you goal is to pay your debts and do it in a way that improves your FICO score by improving your credit history.  These work hand in hand. Once you start this process, creditors will see that you are doing the best you can to get back on your feet and this will enhance your credibility in their eyes. 

{{{If attacking all your bills at once seems too overwhelming for you,|If you have too many debts| to consider paying back at once, just concentrate on only one at a time.  By making a list of the most pressing bills at the top, contact each creditor and let them know you are structuring a repayment plan rather than go bankrupt and ask if they can help you structure a plan that will be easier on you and will ensure they get paid eventually.  Believe me, they love it when people call them with a willingness to do the right thing.

Finance companies really just want to earn interest on their money so it makes sense for them to help you. Focus on one lender first. Once that lender is paid off, move on to the next one on the list until your debts are whittled down to a manageable level based on your income.

You have to realize that some things cannot be immediately erased when fixing your credit. Your credit report will still show older late payments and charged-off accounts on your report for up to seven years. Bankruptcy is even tougher. They remain on your record for up to 10 years.

Most lenders, however, look for new patterns of payment rather than focusing on older one-time or rare credit mistakes you have made.  That’s why more recent on-time bill payments will improve your your credit worthiness in their view. A friend of mine actually bought a new home even though he had a bankruptcy 5 years earlier still on his record. How did he do it?

He phoned the mortgage company and talked with a local officer. He asked them to look closer at his history, how he had been paying all his bills on time for more than two years. It worked.

Nothing is as persuasive as consistent, on-time bill payments and responsible credit practices when it comes to repairing your credit and increasing your FICO credit score. 

Some experts claim the average time it will take to rebuild one's credit to the point where you are acceptable for a major credit card or small loan is approximately two years. I disagree with that because I know what is possible when one is determined. You could be well on your way within months, not years.

When trying to improve your credit score or credit history, here are my top 4 things to avoid:

1. Never ask a lender to lower your credit limits.

There is an all-important gap between your balances and your available credit that must be maintained. 

2. Late payments are very bad.

It's a fact that a late or missed payment will hurt a good FICO score more than it will lower a bad one. A missed or late payment could cause a drop of 100 or more points if you have a FICO credit rating of 700 points or more! 

3. Almost never consolidate your debts.

Applying for a new account can ding your score. Transferring balances from a high-limit card to a lower-limit one, or concentrating all or most of your credit-card balances onto a single card can hurt your FICO scoring. 

4. Don't ask for new credit if have ample credit available in your existing accounts.

The fewer active balances you have, the better. An exception might be a mortgage loan if you have no other such loans on property.

These suggestions are aimed at helping you if you have a FICO credit score below 650. However, once you hit the 750 mark, you are "golden" to most lenders and, if your scores are in the "excellent" category, 760 or above, you can just about get anything you want on credit. Our score is always 810 to 830. Imagine in what position that score would put you?