Credit repair the ultimate guide to increase your cre, FICO score, remove negative items, ) oscar lyman

Credit Repair:The Ultimate Guide to Increase Your Credit Score, Decrease Your Debt, and Manage Your Finances... Chapter 2: How to Increase Your Credit ScoreHow Scores Decrease Steps to I

Credit Repair:

The Ultimate Guide to Increase Your Credit Score, Decrease Your Debt, and Manage Your Finances

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Table of Contents

Introduction

Chapter 1: What is Credit

What is Your Credit Score?

Chapter 2: How to Increase Your Credit ScoreHow Scores Decrease

Steps to Increase Your Score

Delving into Steps 6 and 7

Final Tips

Chapter 3: How to Decrease Your Debt

Method for Getting Rid of Debt

Credit Card Reduction

Reducing Your Overall Expenses

Chapter 4: Establishing Good Debt

Steps to Build Proper Debt

Chapter 5: Manage Your Finances

Creating a Budget

Re-evaluating Your Budget

Staying Strong Against Consumerism

Conclusion

Credit—it is a word we can learn to hate; particularly, when we get into a situation that requires us torepair it You can improve your credit, but not with magical solutions Your credit and your FICOscore will not be corrected overnight with any techniques you may read about, even here

It takes time, persistence, and determination to meet your financial goals to see a resolution Luckily,you have access to a guide that will offer you step-by-step instructions that anyone can follow

You will first learn about credit, your credit scores, and types of debt You will gain knowledge forhow to increase your credit score and the major complications that can arise to decrease your score

This guide will explore methods to reduce your debt while establishing good types of debt that helpyou in your financial stability

Eventually, you will gain insight into managing your finances better It is possible to live debt free,with excellent credit, and top-notch financial management

The secrets are within these pages, all laid out for you to read through and understand with ease Thefirst step you will take right now is to determine what your financial goal is: do you want to live debtfree, with minimal debt, buy a home, or make your score 800? Set your goal and then follow the steps

to ensuring it happens

Chapter 1: What is Credit

Credit is a form of purchasing by borrowing money that will pay for goods or services Credit isprovided by a grantor, whom you will pay back per the agreement You will pay the amount you spentplus finance charges, at an agreed upon time

Finance charges are also known as interest fees, which is a percentage based on the sum of moneyborrowed You may already understand this definition, after all, you are reading this book becauseyou need to repair your credit However, it is also possible that you need to improve your creditbecause you have little credit history

Most of us understand the larger definition of what credit is but do not stop to consider the types ofcredit that can impact your credit history, including improving or worsening your credit score

Four types of credit exist Revolving credit is like a credit card, where you have a credit limit thatyou can charge up to, and each month you carry a balance, paying a minimum payment to keep

spending on that credit line

Charge cards are in certain ways like credit cards You have a limit You can spend up to that limit;however, charge cards require you to pay the entire balance at the end of the month or on the paymentdate

Service credit is a credit agreement for services, such as mobile phones, electricity, and gym

memberships You pay the amount each month based on usage or a specific service charge Somecompanies like cell phones report this credit to the reporting agencies

An installment loan is available in two types: secured and unsecured Secured Installment credit is amortgage or car loan You used a particular amount of money to make a purchase, agreeing that forthree to thirty years (depending on the type of loan) you would make a monthly payment Interest andtaxes are part of the agreement Unsecured loans are those that are not backed by goods A personalloan that does not have collateral, such as a house backing it, is an unsecured loan

Credit is a necessary part of life if you want to own certain things, such as a home or car Most of us

do not make enough from our salaries to cover a massive purchase Good to excellent credit is thebest way to buy a house or car because it can help you obtain a lower interest rate Credit is also used

by landlords to accept or deny a rental property to you

To obtain credit, most grantors will assess how much credit history you have, if this history is in goodstanding, and whether your debt to income ratio is in proper balance

If you have more debt than income, it is possible for your credit score to be lower than excellent orgood, and someone may deny giving you credit for fear that you will have too much debt.

What is Your Credit Score?

Your credit score is a three-digit number created using an algorithm to rate the information on yourcredit report There are a few credit scoring models out there, but creditors typically look at yourFICO score FICO scores range from 300 to 850 Anything above 750 is considered excellent Youwant your score to be anywhere from 700 to 850 to get the best interest rates for the credit you need.Scores above 700 are good Scores between 600 and 700 are fair, and anything below 600 is notgood

When calculating your score, the payment history, amounts owed, length of history, types of credit,and new credit matter Personal and demographic information is not applicable to the score

Your payment history accounts for 35 percent of your score This history assesses your ability to pay

on time, without creating delinquencies Missed payments and late payments lower your score

The amount you owe for all your accounts counts for 30 percent of your score Companies look to seehow much credit you have and how much you have used on revolving credit accounts If you havemore than 50 percent of the credit limit used on credit cards, your score will be lower

The length of your credit history counts for 15 percent of the credit score and assesses how long youhave had credit accounts open and the account activity The score is evaluating if you consistentlyclose and open new accounts or keep accounts open for several years

The types of credit you have are 10 percent of your credit score The company creating the scorelooks at revolving and installment accounts to determine if you have a fair spread of both types ofcredit or tend towards one type

New Credit is also 10 percent of your score This part of the score views new credit pursuits,

including the number of new accounts and credit inquiries that have been made

Some companies reporting to the credit agencies do so each month, but many will report your historyevery three months Typically, the average is taken for those months, so if you make one late payment

it may not appear, but if you make two late payments, it will be recorded

Certain types of credit count more than others, such as student loans and car loans Car loans areweighted more in your score than student loans If you walk into a car dealer with only student loans,four years of rent payments, and low balance/low limit credit cards, you are seen as a person without

a credit history Your scores may be in the 700s, but the interest rate will be higher than someonewith multiple credit cards, car loans, and a mortgage because you lack credit

The above factors are imperative for your understanding of repairing your credit

Chapter 2: How to Increase Your Credit Score

Numerous situations can impact your credit score Obviously, how much credit, the amount you owe,the length of your history, types, and new credit form your score However, what are some things thatmay decrease your score?

How Scores Decrease

The following are the top reasons your credit scores decline

High debt to income ratio

Credit utilization ratio

Applying for new credit accounts

Payment history (particularly a negative history)

Derogatory marks, including accounts in collections, tax liens, and bankruptcies

Age of open accounts

Total accounts you have and whether you have a mixture of types of creditYou can take steps to increase your credit score Everyone’s situation is different You may haveaccounts in collection and be able to pay those off within a few months, with a new agreement

Someone else may have a bankruptcy, which will be on your record for seven to ten years According

to FICO Chapter 13 bankruptcies are on your record for seven years and Chapter 7 filings remain onyour report for ten years Other negative information such as late payments will be on your record forseven years

Unfortunately, the credit reporting agencies (Experian, Equifax, and Transunion) do not always cleanyour record after the appropriate length of time You may need to actively request information to beremoved from your credit history, negative details, to improve your score

Steps to Increase Your Score

It is time to learn what you can do to improve your score The steps in this section are proven

methods for you to follow You may not have some of these issues on your credit report, so you canskip steps if they do not apply to you

1 Visit one of the credit websites that offers you a free credit report Just type “Free creditreport, ” and the main supplier of credit reports will pop up Some places like MyFicocharge you per month for your report and scores Your score is not always free; however,your credit report should be You can also approach all three credit reporting agencies tohave your report sent to you

2 Assess your credit report for accuracy Are there phone numbers, addresses, and

accounts that do not belong to you, but appear on your report? Sometimes reports haveinaccurate information because the reporting party enters misinformation or similarnames and addresses on your report

3 You can send a letter or fill out a form online to dispute all inaccuracies Any address,telephone number, or credit inquiry that you did not allow can be removed Theseelements do not impact your score other than to assign credit that is not yours Anincrease in credit inquiries will lower your score as it factors in the calculation Thelower score is why you want to dispute any information that is incorrect

4 You must dispute any lines of credit and accounts that are not yours If someone has

stolen your identity, you may have accounts open in your name You need these removed

5 Are there old accounts hindering your score? Anything that is seven to ten years shouldautomatically fall off; however, sometimes the information does not You have the right toask for information to be removed from your credit history if it is doing you a disservice.Let’s say ten years ago you missed a couple of payments You can have those marks,which go against you, removed In fact, you can have the entire account removed if it is

no longer open The length of credit history and type of credit history is important, butlate payments or missed payments hurt your score more than having a longer history willhelp Any accounts you still have open need to remain on your credit history, even if theyhave troubling information—just remember old enough data can be removed

6 It is time to assess your credit utilization First, how many accounts do you have that areopen and active? What types of credit are these accounts? If you have credit cards, dothese credit cards carry a balance higher than 50% of the credit limit? Secured loans and

revolving credit weigh more than bank accounts, savings accounts, student loans, andservice accounts If you can show you keep on top of your installment agreements and you

do not carry credit card balances that are more than 50% of the limit, your score will behigher

7 What is your debt to income ratio? If you make $50,000 in a year but have $150,000 indebt, then your debt to income ratio favors more debt

Delving into Steps 6 and 7

Step six has its protocol to follow You are not going to run out and buy a new car, secure a mortgage,

or add more credit to your credit history just because you may lack a few times of credit It will not

be prudent for financial management purposes, and furthermore, it will not improve your score

enough to warrant such action Instead, you need to determine where you stand with the credit you doutilize

With step seven being about how much debt you have, you also need to consider what actions you cantake to reduce your debt and create a more favorable debt to income ratio

1 Start with credit cards Are there any credit cards with a low balance that you can

immediately pay off? For example, if you have a credit card with $200 and you have

$5,000 in a savings account, use $200 to pay off the credit card You have a credit cardwith a zero balance Your debt amount is also lower

You may have a situation where you have three or more credit cards, all with $5,000 or more in debt,and limits that are near $10,000 If you do not have the savings to pay off all those credit cards, thenyou need to follow step 2

2 Take some of your savings to reduce all your credit cards to a balance of 49 percent ofyour credit limit If your limit is $10,000, then you should have no more than $4900 as thebalance on your card

By reducing the debt, you have your debt to income ratio appears in a better light; thereby, increasingyour score over time Furthermore, by reducing your debt to less than 50 percent of your credit limit,you are going to see an increase in your score

Credit utilization and debt-income ratio assessment are going to help you in the next chapter as a

means of lowering your debt It is handy that if you work towards increasing your credit score, youalso work towards lowering your debt