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How to Strengthen Your
Credit Rating...
Page 2
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4) Get rid of credit. Close accounts that you're not using. Having too much
credit may have got you in "hot water" in the first place. Start with accounts
that have zero balances, high interest rates, and high annual fees and then move on to
others. Make sure you send a letter to the issuer requesting cancellation of the account.
Remember to save final statements showing a $0 balance for future reference.
5) Open a bank account. Open either a checking or savings account to show
you have a source of money to make payments. Creditors like to see this -- a sign of
stability. It also shows creditors where they can go to collect money if they ever have to
sue you.
Credit Repair Agencies
Stay clear of credit repair agencies, clinics, or debt doctors who claim they'll fix your
bad credit rating. For a large fee, they promise to remove negative credit information
from your file or create a new credit history for you. Legally, this is not possible. They
are a scam, so move on. The only way to re-establish credit are time and an improved
credit record. There are no quick fixes. No magic tricks.
Other Information
There is certain negative information in your credit report that only time can cure.
Information that is accurate will stay on your report for seven years. According to the
the Federal Trade Commssion (FTC), there are a few exceptions:
- Bankruptcy information is reported for
10 years.
- Credit information in response to an
application for a job with a salary of more than $75,000 has no time limit.
- Information about criminal convictions
has no time limit.
- Default information concerning U.S.
Government insured or guaranteed student loans can be reported for seven years after
certain guarantor actions.
- Information about a lawsuit or unpaid
judgement against you can be reported for seven years or until the statute of limitations
runs out, whichever is longer.
Credit and Debt Calculators:
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• Should I pay off debt or
invest in savings?
• What will it take to pay off my balance?
• How important is the
interest rate?
• Should I consolidate my
credit cards?
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