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Improve Your Credit Score

Many of you have been asking me for this. Well, here it is! The how to of credit repair!

There are so many infomercials and ads around lately offering to ‘fix your credit’ or improve your credit score it’s difficult to know who’s offering a helpful service and who’s just out to take your hard-earned money from you.

Don’t be fooled. These companies are making money off people who can least afford it by offering nothing to do the same thing you could do on your own.

Despite those ads telling you how easy it is for them to fix your credit for you, there are some things that just can’t be fixed easily or quickly.

You really can take steps to repair your own credit score and it’s not as difficult as you might think.

Let’s look at some things you can do to begin re-building your credit right now:

* Fix Errors

You’ll need to order a copy of your credit report to check if there are any errors on your report.

Many companies report things in error. Maybe your name is spelled the same way as someone else’s or perhaps they didn’t list a payment that was made. The point is errors happen and credit companies must respond within 30 days if you challenge an entry that was made if you think there’s an error.

* Fool the Computers

Most banks and credit companies run on computerized software that tells them what amount of repayment is due to them each calendar month.

That software doesn’t care if you pay your bill daily, weekly, bi-monthly or whatever – as long as the correct amount of money is sitting on your account by the due date.

This is where computers can be fooled into thinking you’re much better with your credit by doing some simple things.

1) Divide your monthly payment into a weekly payment (or fortnightly)

2) make your repayments more frequently (like weekly or fortnightly)

3) round your new repayment amount up to the nearest $5

By doing these little things, the computer instantly recognizes that you’re paying more than you need to AND you’re paying more frequently than required. This can improve your credit score and have the added benefit of making it harder for you to fall behind with payments in future.

* Payment Plan

When you’re already behind on your bills, it can be difficult to catch up any late payments. It’s important you call your creditors and explain your situation. Ask to negotiate a payment plan to catch up with overdue payments and explain that from now on you’ll be paying ¼ of the monthly amount each week plus a few dollars.

You’ll be surprised at how willing they are to negotiate as long as you are honest about your needs.

* Re-Negotiate and Consolidate

Take a close look at the statements on your existing debts. Some credit card companies can charge up to 18%. That’s a lot of interest. Call your lender and see if they’ll negotiate the rate down. A lower rate means lower repayments, which helps. If they won’t lower their rate, ask if they’ll consolidate your outstanding debts into one easy, lower-rate option.

Trying to pay off several cards with interest rates around the 18% mark feels like going backwards. Adding them together and rolling them into one personal loan at 10% is cheaper, reduces your repayments and means you’re paying an amount of the principal with every payment you make.

* Be Proud

It seems like a strange tip – but be proud that you’re doing something to improve your credit situation instead of hiding your head in the sand.

You really can begin fixing your credit score on your own today.