How can you get paid to raise your credit score? It is quite simple but very few people think about it. If you knew what you could do yourself to raise your credit score you could get better interest rates on homes, cars, boats, credit cards, insurance, and even recreational vehicles. How much can you save? Raising your credit score can even make the difference in owning your own home or staying a renter forever. It can also stop you from living the life you deserve.
Take for instance you want to purchase a home but your credit score is 580. You may pay an interest rate of 8.5% on a home loan. If your credit score was 720, you might be paying a 5.5% interest rate. The difference doesn’t appear to be much, but on a $150,000 home the difference would be $375 on the monthly payment, every month. That higher monthly payment would add up to be $4,500 per year and over a 10 year period it would be $45,000 without the consideration of the unearned interest from loss by overpaying the creditor. The bottom line is the home is the same for the owner but the payment can vary dramatically. In this case if you had the 580 score you would have paid 35% more for the same home, just because of your credit. But wait there is hope. That is what this article series is all about.
If your credit score is too low it can actually make you unqualified for a home purchase. That alone (with the above example) can cost you at least $2,500 per year alone in a tax deduction. You either get that deduction or your landlord does. By now I am sure you are starting to see why credit scores are responsible for people living paycheck to paycheck. How can you get ahead when you are over paying for every purchase that is made on credit?
So what is the first thing you can do to start getting great credit? You’ll need to see what is on your credit in order to see what to do. I would recommend going to a web site such as http://www.privacyguard.com/. Some older negative credit items may have fallen off as there are a statutory limits to how long items may remain on your credit. Usually it is 7 years as a rule, however there are other considerations such as bankruptcy. Items can stay on your credit for up to 10 years from the bankruptcy discharge. Viewing your credit report should allow you to see if some items should be removed and are still on the credit report.
Also see if you have been reported with negative items such as late payments. Late payments are reported when you are delinquent on your payment for over 30 days. If you have a dispute with the payment date, it is recommended that you contact the company that reported the late payment and ask if they can remove this from your credit report. This is called a courtesy late removal”. Some companies will help you in your quest and some won’t. Be persistent.
You can always dispute your information with the credit bureaus directly. Here are each of the credit bureau toll free phone numbers. You can always dispute a late payment through them and as a last resort contact a credit restoration company to aid you in achieving good credit again.
Trans Union 1-866-887-2673
Equifax 1-800-685-1111
Experian 1-888-397-3742
If you have judgments, collections, repossessions, or a foreclosure you may want to seek the help of a credit restoration company. Credit restoration should be approached in a cautious way. Look for the following signs that the company is legitimate. The company should have a web site and some trackable information on the Internet. To do this easily simply go to http://www.google.com/ and select your company name or the owner’s name. Doing a google search this way should turn up something so you can make a decision whether you can trust this company and it’s owner. The owner should have a license from the state they are in. It may be a mortgage, real estate, or even a debt consolidation license. Any license to show that if they are legitimately in business. This is just another way of protecting your best interests.
The next important thing that will effect your credit is making payments on time to the current creditors you do have. The easiest way is to have an automatic payment made by your bank or to have it taken directly from your checking account. By making payments this way you can be assured to maintain your credit payment history. If it feels like you have too many late payments showing on your credit, just simply start now by making them on time. There is no better time than right now.
Each time you do something to make your credit better it pays you in the long run.