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10 Credit Commandments

June 4, 2018 by  
Filed under Blogs, Credit Score


10 commandments

Your credit scores are determined by the information reporting in your credit reports which is an overview and history of the decisions that you have made while maintaining your credit.

Every decision you make to apply for a new account, open a credit card, pay your bills, charge your credit card, etc… impacts your credit scores and determines your ability to acquire credit in the future. This is why developing healthy habits is to vital maintaining and growing your credit scores. Ultimately, you’re in control of your credit scores by managing your credit responsibly.

So, let’s take a look at some healthy habits that will ensure a higher credit score.

1. Pay your bills on-time
Paying your bills on time is the single most important factor in responsibly maintaining and improving your credit scores. One late payment can drop your credit score over 100 points so pay your bills on time – every time.

2. Maintain a low Credit Utilization
The percentage of balance that you maintain on your active credit accounts in proportion to your credit limit or high credit amount typically accounts for 30% of your credit scores. It’s difficult to quickly pay down installment loans like mortgages and auto loans but, you can manage your credit card utilization. Don’t max out your credit cards, keep your credit card balances below a 20% credit utilization rate (balance/credit limit) to get the most out of your credit scores. For example, if the credit limit on your credit card is $1,000 – keep your balance at $200 or less.

3. Don’t close your oldest accounts
Length of credit history is another important factor in determining your credit scores. The longer your credit history – the better your credit scores. Length of credit history is determined in 2 parts; the age of your oldest active account and the average age of all of your active accounts. Keep growing your credit history by maintaining activity on your accounts and by not closing your oldest accounts.

4. Maintain a Mix of Credit
Lenders want to see that can be responsible for managing more than just one type of account. Maintaining a healthy mix of installment accounts (mortgage, auto loan, student loan) and revolving accounts (credit cards and department store cards) will ensure a higher credit score.

5. Limit your Inquiries
Every time you apply for credit, whether it’s a credit card, department store account, auto loan, mortgage, or any other financial instrument, an inquiry is placed on your credit report as a record of your application. Having too many inquiries on your credit reports makes you look desperate for credit and throws up a red flag for lenders. Limit your applications for credit to a maximum of one inquiry every 6 months.

6. Check your credit reports
According to a study by the National Association of State Public Interest Research Groups, 79% of all credit reports contain errors. 54% contained inaccurate personal information such as misspelled names, incorrect social security numbers, wrong dates of birth, addresses, etc…. 30% listed closed accounts as opened, 22% had duplicate accounts, 8% were missing a major trade-line such as a mortgage or auto loan, and most alarming, 25% contained serious errors that could cause consumers to be denied credit. On top of all that, identity theft is now the fastest growing crime in America so, check your credit reports often to make sure that the information being reported about you is 100% accurate and won’t cause you issues when applying for credit.

7. Protect your personal information
As already mentioned above, Identity Theft is now the fastest growing crime in America. With recent breaches to Equifax, Saks Fifth Avenue, Orbitz, Yahoo, LinkedIn, AOL, among others – you can rest assured that your private information is out there on the dark web. Be diligent about checking your credit reports of any unauthorized inquiries or accounts, check your credit card statements for any suspicious charges, change your passwords every 6 months, don’t use the same password for all of your accounts, use 2 factor authentication when available, get a shredder and don’t open any suspicious emails, click any suspicious links, or download any suspicious files. Be safe, be diligent and protect your identity and personal information.

8. Don’t Co-Sign for anyone
This is a tough one because it’s human nature for us to help those close to us but, we have seen so many cases where credit scores were ruined because of a co-signed loan. If the person your co-signing for needs a co-signer it probably means that they have not done a good job of maintaining their credit responsibly. Unforeseen circumstances like a job loss, medical issue, or personal problems can derail not only your credit but, also your friendship. So unless you’re ready and willing to take over 100% of the payments and responsibility on the loan, if the personal you’re co-signing for can’t meet the financial obligation, don’t co-sign. Protect your credit for yourself and your family.

9. Maintain an Emergency Fund
Maintaining a 3-6 month emergency reserve can save your credit and help you overcome financial difficulties brought on by job loss, medical issues, natural disasters, or relationship problems. It’s easier said than done but, start by opening up a separate bank account and designating it as your emergency fund, then, put aside 5%-10% of your income into that fund every month until you have a 3-6 month reserve to live off in case of an emergency.

10. Work on Your Credit
If you have derogatory information reporting on your credit reports, work on removing it by leveraging consumer protection laws such as the FCRA, FDCPA, and FCBA. Investigate your information with the credit reporting agencies, validate your debt, request method of verification on verified accounts, try goodwill requests and permissible purpose verification, and everything allowable by law to remove as much derogatory information from your credit reports as possible.

If you need help, CreditFirm.net has helped thousands of consumers remove negative information such as late payments, collections, charge-offs, repossessions, judgments, tax liens, etc… from their credit reports and increase their credit scores.


Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 3-5 days.

Support. Award winning customer service guarantees your satisfaction.

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7 Steps To Better Credit

June 26, 2013 by  
Filed under Blogs, Credit Repair, Credit Score

by: .

credit tips

It’s the question we get asked most often.

“What can I do to improve my credit score?”

And although the answer is almost always a long winded speech about being responsible with your credit, there are a few things that you can start doing today to begin increasing your credit score.

But before we get started, let me just get one thing out of the way. The credit score is a gauge lenders use to determine the likelihood of a borrower becoming more than 90 days past due on a loan within the next 2 years.

Having said that, your goal is to make yourself look less likely to become past due. As this happens, your credit score will begin to increase.

So without further delay, here are the 7 actions you can take right now to improve your credit scores.

1. Pay Your Bills On-Time

Even if you have had late payments in your past, try to string together 6 months of perfect payment history and you’ll be surprised by how much your credit scores improve.

Show lenders that you’ve turned the corner and become a habitually punctual borrower. Your credit score will be rewarded.

2. Pay Down Your Credit Cards

Withhold 10% of every one of your paychecks and use the money to pay down your credit card debt. You’ll be surprised how much of a dent you can make in your credit card balances.

Having high balances on your credit cards makes you look like you are living off your credit and can’t afford to live of your income. This puts you in a high risk category. Paying your balances down to a 20% utilization rate (balance = 20% of the credit limit) will show lenders that you are fiscally responsible and can live within your means. As your credit card balances decrease, your credit score will rise.

3. Don’t Close Old Accounts.

This is simple, 15% of your credit score is the average age of your open accounts. Closing old accounts shortens your length of history and decreases your credit scores. So keep your old credit cards active and open, use them every 3 months to buy a pack of gum and pay the balances off at the end of the month. You don’t want the credit card company closing your account due to inactivity.

4. Stop Checking Your Credit

Every time you apply for an extension of credit, an inquiry appears on your credit report and lowers your credit score. This is done to stop you from acquiring too much credit too fast. Which brings us to our next point.

5. Build Credit Slowly

If lenders see that your getting too much credit at once, it makes you look like you’re running out of money and need new credit to live off. This makes you high risk. So build credit slowly and responsibly. How slowly, a maximum of one new account every 6-12 months.

6. Check Your Credit Reports

This should have probably been up at the top, but either way, you need to know what is being reported about you. Considering the most recent FTC report from January 2013 found that 21% of credit reports contain errors (over 50 million people), you should probably check all 3 of your reports to make sure that everything that is being reported about you is 100% accurate.

7. Repair Your Credit Report

If your credit report is displaying any information that looks questionable to you, contact the credit reporting agencies, creditors, and furnishers to have them verify and validate all of the questionable info. You would be surprised at how the most inconsequential detail can impact your credit score.

If you need help leveraging your consumer laws against the credit reporting agencies and creditors, let CreditFirm.net’s expert credit consultants fight on your side.


Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review