PLANNING YOUR FUTURE
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How's Your Credit?
Here's how to improve your credit score now.
By Tanya Marchiol
Want to improve your credit score, but worried the unstable economy will keep you from doing so? Not so. Frank Lopo of Premier Credit Management LLC says, "The thing about credit is that time is your friend. The more time you have to fix, maintain or review your credit, the less stress you create for yourself. Besides, it took you time to get into this mess, so it will take time to clean it up."
Improving your credit score isn't as hard as most people think. You won't be able to do it instantly, but six to eight months is a good window to get the desired results.
With Lopo's help, I offer a few tips to get you started improving your credit rating.
Take Yourself Off the Credit Bureau Marketing List
Ever been tempted by offers of credit or "low interest, no qualifying" loans and mortgages? Don't be. You can rid yourself of the option to damage your credit any further by permanently taking yourself off the credit bureau marketing list, where credit bureaus sell your information to companies that want to offer you credit. Removing yourself from their list will prevent you from receiving these offers, decrease your chances of identity theft and even increase your score by 5 to 10 points. Simply visit optoutprescreen.com.
Keep Credit Card Balances Below 30 Percent of the Credit Limit
If you have multiple credit cards, transfer high balances to cards with lower balances so that all cards are 30 percent of their respective credit limits.
Maintain Three Active Revolving Credit Lines
The oldest credit cards with the highest balances have the greatest impact on your score. So never close a credit card account, and try to wait six months between opening new accounts. Revolving credit lines include those from Visa, MasterCard and Discover – not department store cards, debit cards or gas cards.
Have At Least One Active or Paid-Off Installment Loan
Auto loans, leases, boats loans or credit attached to personal property (such as computers or furniture) are all examples of installment loans. If you purchase any of these items, make sure to get an installment loan, not a revolving line of credit.
Negotiate a Deletion Letter Before a Collection Is Paid
Before you agree to pay a collection, always try and negotiate a deletion of the collection from your credit report. Get this agreement in writing and signed by the collection company before you pay. Note that the further away the negative items on your credit report are, the less impact they have. For instance, collections that are two years old only hurt your score minimally. Negative items more than four years old don't really hurt your score at all.
Tanya Marchiol is president of TEAM Investments, one of the leading real estate and investment firms in Arizona. She is currently working on a book titled Prosperity Principle, based on her belief that each person has the ability to achieve his or her goals. Tanya may be contacted at Tanya@teaminvestmentsinc.com, or you can visit her website at teaminvestmentsinc.com or the TEAM Investments blog at TIDaily.com.
