How to repair your credit and increase your credit score
If you plan to apply for a loan or a mortgage your credit score will probably determine whether or not you will actually get the loan or mortage and what interest rate you will be charged. Good credit scores generally begin around 680, although this number may differ slightly among lenders. If your credit score is below 680 there are ways you can improve it. Increasing your score just 5 points can save real money. For example, if your score is 697 and you increase it to 703, then you could save yourself thousands of dollars over time as a result of a slight improvement to your loan’s interest rate.
But it takes time to boost a credit score, so start the process at least three monthsbeore applying for a loan -- a six-month head start is even better. Here are the steps you need to take to repair your credit and improve your credit score.
Make sure that you have a current copy of your credit report. You are entitled to get one free credit report annually. No matter what you see in the television commecials there is ONLY ONE authorized site and that is www.annualcreditreport.com. If you have never obtained your credit report before you need to obtain one from each of the three companies. They will all try to sell you other products, but you are under NO obligation to purchase anything else. Have plenty of paper in your printer as these reports can be very long.
Check carefully to make sure there are no errors. Each reporting compnay has its own way for you to correct or dispute errors. Follow their instructions, and if you see errors, start the correction process. Errors can rob you of many points on your credit score.
While you may be tempted to put all of your credit card charges on one or two lower interst cards it is much better to distribute your credit card debt to additional cards to change the ratio of debt to available credit. For example if you have a credit score of 670 and you have debt on only one card, but have four additional credit cards with zero balances, evenly distributing the debt of the first card could move you closer, and possibly into, that ideal bracket. Of course, you should be careful in the way you use higher interest cards. It can be a juggling act, but it is worth the effort.
Keep your existing credit card accounts open and active. There is a real temptation to close credit card accounts that have zero balances, but you can lose the benefits of a long-term credit history and increase the ratio of debt-to-available credit on the remaining cards. So don't close those old accounts. Use them from time to time, but pay them down quickly.
Try not to have a number of companies checking into your credit. Multile inquiries into your credit history can lower your score anywhere from 2-50 points. When it comes to mortgage and auto loans, even though you're only looking for one loan, multiple lenders may request your credit report. However, credit reporting agencies will count multiple auto or mortgage inquiries in any 14-day period as just one inquiry, so try and stay within that time frame.
And, of course, don't build up a lot of credit card debt in the six months prior to applying for a major loan or mortgage.
Amazing new credit repair guide, The Attorneys Guide To Credit Repair lets you use the most effective credit repair tactics available.
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If you want to modify any of your existing loans, there is a great deal you can do on your own. Look into this inexpensive Do-it-yourself loan modification kit.
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Don't let divorce ruin your credit
Someone going through a divorce, or contemplating a divorce, is in an emotional pressure cooker. Not really a time to make crucial decisons without some trusted, and professional, advice.
If the divorce is truly amicable (and yes, there are some) where there is some basic agreement on such crucial issues as property division, care of children, and basic financial matters, it makes good financial sense to use a mediator, who is much less expensive than an attorney.
On the other hand, where such agreements are liable to be contentious, you should have both an attorney and an accountant. The attorney to walk you through the legal nightmare, and the accountant to make sure you minimize tax liabilities.
Make sure you have true copies of all legal and tax-related documents.
Two other tips:
Unless previously agreed upon, and monitored, cancel joint credit cards so your spouse will not be in a position to rack up big bills.
Start to build your own good credit history by applying for one or two cards in your own name. Use then cautiously and make sure your monthly payments are on time.
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