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Remember, even if you have perfect credit you can still get denied for new credit due to variables such as income, outstanding credit balances and having too many credit card accounts. Use these tools to maximize your credit score.
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Start Small. Open a checking or savings account to establish a positive checking history with CHEX systems.
Join A Credit Union. A credit union is willing to consider your personal and financial situation when reviewing your application for a credit card or loan and this makes getting the loan much easier. Demonstrate your stability by making regular deposits to your credit union accounts.
Be Selective. Only apply for credit that you know report to the three major credit bureaus (you can find out by calling the creditor and asking which credit bureaus they report too), otherwise there will be no proof of your payment patterns and you will add unwanted inquiries which lowers your credit score.
Keep inquiries to a minimum. Only apply for accounts that you have a chance of getting. This means avoid applying for platinum cards you know you don't qualify for. Remember, too many inquiries will hurt your credit.
Carry 2 to 5 Credit Cards Only (But don't start closing accounts if you already have too many.) Two to five cards are the ideal number to have in order to maximize your credit score. If you don't have any credit cards, we suggest that you start by applying for at least 2 secured credits immediately. We refer our clients to http://www.orchardbank.com/ and http://www.cardoffers.com/. Remember to keep the balances as low as possible when you are contemplating applying for credit in the near future (House, car etc.) But use each credit card at least once every couple of months or it will be rated as "Inactive" and not be counted towards your credit score.
Add yourself as a secondary cardholder with your Spouse or Parents ONLY. Although the laws have changed and "Authorized User" accounts are now not giving consumer's as much of a boost in their scores as they used to, a way to have history added to your credit is to be added onto a Spouse's or Parent's credit card account as an authorized signer. If the last name's are the same, you will probably still receive the benefit in your scores. Many banks and credit unions will issue a second card to the person of the cardholder's choice. What this does is take the persons good payment history and puts it on your credit report. Once you receive the credit card, send a copy of it to the three credit bureaus to make sure that they are reporting it under your social security number also. Don't rely on the creditor to do this directly.
Understand that paying off old collections & charge-offs during the loan process will hurt your score. The credit bureaus report collection accounts and charge offs for 7 years from first serious delinquency that led to the charge off. If the account is three or more years old and you pay it, your credit report will show a "paid charge off" and make the date of recent activity more recent, which the credit scoring model sees as a recent collection activity and reduces your score as a result.
Contact me to find out more about how to maximize your credit score.
Select a link from the list below to begin learning more about your credit.
Get a FREE Copy of Your Credit Report
It’s Never Too Late to Repair Your Credit
Inside Your Credit Report
What’s In Your FICO Score
What Is Good Credit
Establishing Good Credit
How to Improve Your FICO Score
Using Credit Cards Wisely
30 Reasons Your Credit Score Is Low
Repairing Your Own Credit
Judgment Strategies
Facts About Credit Inquiries
Your Rights Regarding Debt Collection
Divorce and Credit
Coming Back After Bankruptcy
Charge-Off Debt & the Seven Year Rule
Top Ten Do's and Don'ts During the Loan Process
Identity Theft and the FACT Act
CRC – What You Can Expect