Consistent payments improve credit score

Some people think that if they pay off all their debts, then their credit score will magically shoot up and give them great credit.

Nope. Your credit score is the sum total of your past credit use, your past credit history, not current payments.

Sure, the fact that you PAY your bills is important. But TIMELY PAYMENTS each and every month are truly the biggie here. It's wise to use a bill-paying calendar -- any calendar will do -- and write in when your debts are due one full week before they are due.

This way, if you are a day or two delinquent in paying them according to your calendar, your payment arrives on time.

When it comes to credit card payments, there's no need to even mail payments anymore. Online bill payment systems actually can post your payment the same day you make it, so long as you do it early in the day.

I personally enter in my credit card payment due date into my cell phone's calendar function. The phone beeps, I look at the message, it says "Pay CC today," and I make time to log in to my credit company's website, authorize the correct payment due, and click "OK Payment." It's done in 5 minutes, and my payments have never been late due to slow mail delivery.

In fact, I usually make the next month's payment a few days AFTER my regular payment is due. So, if my credit card payment is due on the 5th of the month, I will log onto my online account on the 7th of the month, make the next month's minimum payment, and know that I can make another payment before the following month by the 5th to help pay down credit card debt. This way, I know I'm not late, and I can pay down credit card balances as my income allows.

If late payments have indeed damaged your credit score, you will need to make months of on-time payments consistently to repair the damage. Consistent payments each month by their due dates is what will improve your credit score, not one-time payments in full.

Raise Credit Score 30pts, Save $76 Year: Survey

The Consumer Federation of America released a study July 19, 2007, stating that consumers could save more than $20 billion a year if they increased their credit score slightly.

On average, each consumer who increased his or her FICO credit score by just 30 points could reduce their credit finance charges by $76 a year.
The CFA claims that most Americans are clueless how their credit scores affect important areas of their lives.

Their report is found at:
http://www.consumerfed.org/pdfs/Credit_Score_Release_07_19_07.pdf

Solution? Paying all bills on time, refraining from using too much of their available credit on their credit cards, paying down debt instead of buying more things, and monitoring and disputing errors in their credit reports are the four best ways consumers can raise their credit scores, according to the report.

The FICO credit score, by Fair Issac Corp., is the benchmark credit score used by 9 out of 10 lenders. Fair Isaac's website (http://www.myfico.com/) details how consumers can lower the cost of loans simply by raisng their credit score by relatively small increments.

We've been compiling free tips on how to improve your credit scores at FindHow2.com since March 2006. We invite you to log on today to learn how to get better credit.

Credit Card Companies Crunch Credit

In a new article: "Subprime may be hitting credit cards, too" Jeanne Sahadi, CNNMoney.com senior writer, writes that credit card companies have begun to take steps to protect themselves while subprime mortgage markets are in turmoil.
Credit card issuers are reportedly raising balance transfer fees and making introductory rates less appealing. They are reducing how long lower introductory rates are valid. And they are taking the onerous step of lowering credit limits on existing cardholders, including some prime customers. Customers might be shocked one month to find that their available credit has disappeared overnight.
Once a credit limit has been lowered it can lead to hefty over-the-limit charges. I know from personal experience that this practice can take a bite our of your budget if you use the credit card, thinking you still have available credit, and the next month you find out you went over your limit. Not only did I incur an over-the-limit fee of about $30 at the time, but I also knew instinctively that I'd just bruised my credit.
Having your credit card company decide you get a lower limit is very likely going to reduce your overall credit score. You will be tapping into more of your available credit, and carrying more than a 50% balance on credit cards tend to result in lower FICO scores.
The credit crunch is spreading to what's in your wallet....
(Read full article here...)

Tougher times to refinance at lower rates.
If you had a credit score of 650 points out
of a possible 850 in 2006, you could demand
much lower interest than those with bad
credit. But now it takes a FICO credit
score of at least 680 to be getting the best
deal.

Boosting your credit score takes commitment
to pay all your bills on time, lowering
outstanding balances on the credit cards you
already owe, and paying down overall debt.
Experts recommend that you keep your
balances below 50% of available credit card
limits, while others caution not to go use
more than 35% of available credit.

It's probably a good idea to follow the
advice of one-third of your credit balance,
and start making plans to pay off credit
card debt as soon as possible.

At this time, it's also not wise to open new
lines of credit. This could signal that
you're desperately in need of more credit to
maintain your lifestyle -- something that is
almost certain to cause concern from lenders.

For more free tips, visit our website FindHow2.com.

Free sample letters dispute credit

We get a lot of requests for free sample letters people can use to dispute derogatory bad credit entries in their credit reports.
We've assembled some easy to use sample letters on our website:
http://www.findhow2.com/repair-credit.html
All you need to do is copy and paste into your favorite word processer this copy, customize the letter to fit your circumstances, and print off 2 copies -- one for yourself, one for the creditor or agency you are writing. It's best to keep a copy for yourself. Yes, I know, you can always print off a separate copy from the saved file on your computer. But my experience has shown me that if I do have a printed copy in a file, and I put ALL of my correspondence in that one file, with the notes of who I spoke to on the telephone, the date I mailed those letters, the dates I received updated credit reports, etc., then I can quickly track the credit repair progress.
I recommend that you send these letters to the CRA's and to your creditors registered return receipt mail, as then you will have a record of (1) the exact date you mailed the letters, and (2) the exact date of receipt and the signature of the person who signed for the letter.

Low credit scores, higher auto insurance bills

You've probably been hearing how your low credit score could result in higher auto insurance premiums when your insurance company does an "insurance check" on you. As if insurance automobile and truck insurance isn't expensive enough, now you pay more if your insurance carrier finds out you have poor credit.

Just another reason to know what's in your credit files and taking the time to fix bad credit.
Today outdated derogatory entries in the files the 3 major credit reporting agencies have on you can cost you in many ways, including your auto insurance payments.

We've detailed additional information to help you lower your auto insurance by fixing your credit scores at
http://www.findhow2.com/how-to-save-money-on-auto-insurance.html

Free tips to fix your bad credit

Knowing where to start to dispute errors in your credit report is easy
once you know how. Here are some websites to check out that offer helpful
credit repair information on disputing credit report errors and helping people
repair their own credit. 



http://banking.about.com/b/a/256245.htm

How To Fix Your Credit Report, Banking / Loans, Got
errors on your credit report? Youll want to fix your
credit report to.



http://www.debthelp.com/guides/credit/credit-errors-corrections-repair.html

This means that you as a consumer should check your credit report for
errors and follow-up as necessary. You don’t want negative
credit to hurt your future.

http://www.oskie.com/equifaxtransunionexperiancredit.htm

Free credit help by a live human! Fix my free credit
report online. ... help and disputed errors on credit
report. ...



http://www.bankrate.com/brm/news/cc/20010906a.asp

Usually, consumers find out about errors in their credit reports
after they're denied credit. To fix mistakes in your credit
report, here's what to do:

"Fix
your credit in just 72 hours" - MSN Money

Anyone whos tried to fix an error in a credit report
knows that it can be a slow, tedious process. Yet some companies promise to
fix credit mistakes in 72 ...



http://www.creditinfocenter.com/repair/Repair.shtml

The whole key to the credit repair procedure is that if the
credit bureaus cannot verify information on your credit report
they must remove it.

http://www.FindHow2.com

Free articles and links to credit repair web sites to help you remove
errors in credit reports and raise your credit scores.



http://loan.yahoo.com/c/basics4.html

Improve Your Credit Profile To Get Better Credit Deals
... The better your credit history, the more likely you
are to qualify for the best credit deals.

How to check your credit report

You never know when an emergency
will arise and you will have to borrow money. So it's important to know how to check your credit report for errors BEFORE you need to apply for a loan.
You might need an equity line of credit, and when you go to
refinance your home, your credit rating will be so low that you
won't even qualify for a bad credit mortgage!
Or a credit card application that arrives in the mail and after you fill it out, you get
turned down because you didn't check your credit to find
outdated, negative entries in your credit report.
Or you've had enough and you want to eliminate credit card
debt, but you can't be a credit consolidation loan even if you
promised to attend consumer credit counseling classes everyday!
It's important to remember that it's not that you're a bad person. It's just that you have bad
credit, and you've first got to understand this: Bad credit is
like bad body odor... it can be fixed!
But you'll need to do certain things in order, like: (1) check your credit, (2) carefully review your credit
report, (3) dispute mistakes in your credit report, (4) write
letters to fix your bad credit, and (5) check your credit again
and again by getting your free annual credit report online.
You can get better credit than you have today simply by making
a plan to fix your credit and sticking to it until your credit
score improves!
You can pay to get your current FICO credit score, but what's really important is knowing what's IN your credit files. For the time being, we'd recommend simply downloading the free credit report you
are entitled to from Equifax, Experian and TransUnion available
for free at http://www.annualcreditreport.com/ .
Once you have your credit reports, you must then take the time to read through
each once carefully, checking the codes and entries and
matching them up with what really happened when
you used credit in the past.
It you were late making payments, then you'll have to wait out
this negative information. You cannot have accurate negative
information removed from your credit files. You can only
dispute errors in your credit report. And errors are likely to
slip in from time to time, so eliminating these during your
credit check will be relatively easy.
Some errors might be that outdated information remains. For
instance, sometimes credit information from a person who shares
a similar name could appear in your credit report and do damage
to your credit score. Or maybe you disputed a bill with a
hosptial in your hometown, and even though you thought the bill
was waived, it winds up showing up as being turned over to a
collection agency, and you have to learn how to deal with a
collection agency all over again!
Reading your credit reports from the three reporting bureaus may seem overwhelming at first. But
reading them will help you start understanding what's in
your credit history that lenders are viewing when they are
making the decision of whether or not to loan money to you.
Armed with this knowledge, plus the effort you will put in to
eliminate any and all errors from your online credit report at
the three major credit bureaus (Equifax, Experian, and
TransUnion), you will go from being haunted with bad credit to
enjoying better credit and getting that loan you need, when you
need it, at favorable interest rates and terms that you
negotiate with your banker.
When you give your credit report a "check-up" you will need a
working knowledge of basic credit repair techniques, and we've
published a summary of these for you to use free at
http://www.findhow2.com/repair-credit.html .