Credit Restoration Handout


Summary


We have covered many ways to re-establish your credit if you have experienced problems. The following provides information to help you maintain your good credit, once it has been restored.

Ways To Maintain Your Credit Score

Pay your bills on time

More than one-third of your credit score is based on your bill-paying habits. Late payments can have brutal consequences, particularly any recent tardy slips. So don't skip any bills (certainly not your rent or your mortgage payment) -- send in just the minimum amount due, but send something.

Don't max out your credit cards

You might have a $15,000 credit limit on your card, but keep your debts to 35% or less of your credit limits. Red flags start waving when your debt-to-available-credit ratio exceeds 50%.

Create a credit history

The longer your borrowing history - particularly if you've been a responsible person - the better your score. If you're going to close some accounts, it might make sense to cancel the most recent ones or ones you have had for one year or less, since the accounts you have had the longest will better establish your credit record.

Avoid frequent card switching

If you're trying to pay off debts, shopping around for the best deal makes sense. But remember, every line of credit you apply for will stay on your record at least seven years, even if the account is open only for a day or two. Take great care when opening and closing accounts. Applying for lots of credit can lower your credit score.

Don't borrow money just to boost your score

Those with the highest scores have a proven history with different kinds of credit -- such as installment loans (like a car loan or mortgage) and revolving debt (your workaday credit card). But borrowing -- just to boost your score isn't worth it. Time and responsible bill-paying habits matter the most.

Know who's checking your credit report

These days your credit score can affect a lot more than just your interest rates. Insurers check it to set your car and home insurance premiums. Potential employers use it to qualify your job application. Each time a potential lender or insurer checks, a "hard pull" is recorded in your file. When you or an employer accesses the file, it's a "soft pull" and has no effect. Occasionally check your credit report to make sure those who are making credit report inquiries have a right to do so.



Credit Restoration
Report Errors and Obsolete Info
Correcting Reports
Free Credit Report

Sample Letters
How to Turn Late Payment Marks Into a Positive Credit Rating
How to Turn Bad Current Debts Into a Positive Credit Rating
Use A Consumer Statement to Explain Negative Credit History
When The Consumer Statement is Most Effective
Summary