If your credit rating isn't where you want it or you've been refused credit, take action today to get your finances back on track. Your credit rating is a very powerful three digit number. If you've ever had a credit card or loan of any kind, you have a credit history. Everything from a burger to a home can be purchased on credit. How you handle the purchase will determine your future credit privileges.
Great credit is 720 or higher out of a possible 850.
Okay credit is 620 to 720. It's satisfactory but you won't be offered rock bottom rates from credit card or loan companies.
Poor credit is below 620. Especially if you're in this bracket, please follow this article carefully to get your number improved.
You CAN fix your credit! One step at a time, your rating will get higher.
1. Go to www.annualcreditreport.com and obtain your credit reports from Equifax (800)685-1111, Experian (888)397-3742 and TransUnion (800)916-8800. This website is the only website where credit reports are 100% free with no further obligation.
2. Once you receive your report, write to credit bureaus to dispute any mistakes you find on your credit report. Nearly half of all credit reports have errors on them.
3. Call creditors you haven't paid in the last 90 days. Offer to send them a large payment in exchange for erasing the "past due" notation from your credit report. Make sure you get the agreement in writing.
4. Develop a reminder system for paying bills on time, then pick a day of the week to go through them and pay all bills that are due soon.
5. After 6 months, request new copies of your credit report. Your score should be improving.
6. Once you're on track with paying your current debt, obtain a new line of credit. Use this for small expenses like gas or dinner then be sure to pay it off each month. The only way to establish good credit is to pay your bills on time.
7. As you pay off credit cards, do not close the accounts. You may need them on your credit report to help your rating even if they have a zero balance.
8. Stop job-hopping. Steady employment is a plus with creditors. Mortgage loans typically require you to have the same job for two years.
9. Higher income is a credit asset. If furthering your education will advance your current position or salary, do it.
10. Start saving money for unplanned expenses. That way, when something unexpected comes up, you won't need to rely on credit to get you through.
It is work and it will take time, but destroying our credit doesn't happen overnight either! Best of luck!
Melissa Sall, Realtor
Sulek & Dutton Real Estate