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Improve
your credit score and save on interest payments.
How much can you save? Go to our
mortgage rate comparison
calculator and find out.
1- Pay off
outstanding collection accounts only if it is originally dated
within the last two years or if the lender/collection agency is
updating the report. As wrong as it sounds, check all the dates
associated with the item and if they are older than two years, leave
them alone. Believe it or not paying an item older than two years
will actually have an adverse effect on your credit score.
2- Carefully plan
to pay as much debt as possible. The object of the exercise here is
to bring down revolving accounts down to 50% of the maximum credit
line or even to under 33% if possible. If your co-borrower has a
card say with only 5% or so against it, then borrow on that card to
up to 30% and use the money to pay down one of your high balance
cards or vise versa.
It is important to pay attention to the total credit line and total
debt also. Having 3 cards of zero balance with credit limits of $150
to $300 each is no good if you have one $3500 limit card with a
$2500 balance.
3- Do not pay off
and close a revolving account. Closing a revolving account has an
immediate adverse effect on your credit rating.
4- Call your
credit card companies and see if they will increase your credit
limit. This will bring the ration of outstanding debt to credit
limit down.
5- Don’t buy a
car! Nothing brings down a credit score more dramatically than a new
car loan. A fixed term loan will have a negative effect on your
credit score for up to 6 months. The negative effect gets lower with
every passing month tuning into a positive effect after 6 months,
providing payments have been made in a timely fashion.
6- Get all in
accurate information removed, we have a whole page dedicated to this
subject including a sample letter.
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