How To Improve Credit Scores
Suggestions for help in improving credit scores:
Accounts that have gone into collection within the last couple of months; pay them off and obtain proof of payment.
Accounts that have gone into collection within the last 4-12 months; just leave them alone and let them age past the 12 months.
Accounts that went into collection month than 12 months ago; just leave them alone. (If you pay them now- the credit rating agency counts it as a more recent collection account)
One of my clients paid a recently placed collection account. She sent in the proof of payment. The item came completely off the credit report. Usually it will still be listed on the report but show as paid.
Judgments- These need to be in a “released status” or “satisfied”. If you have status unknown or any other open status, pay them off and get an “Order of Satisfaction”.
Call Credco’s consumer dispute line (the reporting agency for all three credit bureaus) at 800-637-2422 and ask for their fax number to be able to send in paperwork proving payments have been made. Make sure you include your full name and social security number on the cover sheet so they can match things up. This is a free service and takes between 30-45 days for things to be corrected.
Mistakes- Sometimes items are on your credit history that belong to someone else. Or your account was reported in error. Get whatever proof you can and send it in to the consumer dispute fax number.
To build new good credit history-
Go to a local bank or credit union and start two “secured “ accounts. You deposit $300 into a savings account for each for the bank to hold as collateral for your new accounts. Start a $300 limit credit card and a $300 installment loan. Charge $25 each month on the credit card and pay it off each month. Get the installment loan as a 12 month term and pay the payments each month, on time.
These two accounts will help build good credit history to offset any derogatory accounts you may have had in the past.
It takes a little time and effort, but the pay off is better credit scores. Higher credit scores equal lower interest rates charged to you on future loans which can save thousands of dollars over the years.
JoAnn Moore, Licensed Mortgage Professional, NMLS #165477
The Mortgage Market of Delaware P O Box 204 Georgetown, DE 19947
Office 302.855.1306, Cell 302.236.1229, Fax 302.855.1308, MMODJoAnn@aol.com