From the previous article "Understanding a credit report and credit repair" is this next series "What helps and what hurts a credit score." Hopefully, you find this information useful in building and maintaining a high 760+ credit score.
What Immediately Helps a Credit Score
1. Pay down all credit card balances to 30% of their high credit. This is called Credit Card Utilization Rate (CCUR). Any usage less than 30% will maintain a high score. However usage less than 20% will help your score to increase dramatically over time. For example, if someone has a credit card with a $1,000.00 limit, they need to keep that card at or below $300.00. Paying that balance down from $900.00 to $300.00 will immediately add points to their credit score. And paying down to $200.00 will get you in the 760+ goal.
2. Getting negative items deleted. Show proof of payment (receipts) and mail copies with a letter of explanation for each paid account to all three credit bureaus. Listed below.
3. Adding yourselves as a joint-applicant on (someone with excellent credit) account card. You won't actually get a card but rather you will have the ability to ride free on someone else's creditworthiness.
4. Consolidating your student loans into one payment. It shows all the small accounts as being paid.
5. Bankruptcy. Yes, bankruptcy! Thirty Percent (30%) of a credit score is based on
the amount of debt you have and a bankruptcy takes that number to $0 in many cases. But, it will be 2 years before they can buy a home with a solid rate, but it does help the actual credit score greatly. Another reason while someone might file bankruptcy is if the debts are large enough to warrant potential judgments. If the amount is $4,000+, it is possible that company might want to get a judgment against them. Bankruptcy prevents that from happening. However, if that debt is more than 1 year old, it is probably that they are not in danger of getting a judgment, as sufficient time has passed to allow for such action.
What Immediately Hurts a Credit Score
1. Buying a new pick-up, house, getting a credit card. After time, these will help them, but not for at least 6 months or so.
2. Inquiries hurt a credit score 3-4 points each time their credit is pulled. The negative affect decreases over time. Inquiries remain on your credit for 2 years & cannot be removed by any credit repair process.
3. Recent late payments, especially 30, 60 or 90 day late.
4. Co-Signing for someone else to get credit and having them default on the debt. Many times the defaulter doesn't have the common decency to inform you of a looming problem.
Mailing Addresses for 3 Major Bureaus: