Q&A: How can I fix my credit score and raise it to 700?
Tuesday, July 20th, 2010 at
12:28 am
Question by Kevin J: How can I fix my credit score and raise it to 700?
My credit score is about 657 I want to raise to 700 and higher, any way I can get my credit report fix and how do i do that?
Best answer:
Answer by My a Momma Mia
You need to make sure that you pay all of your bills on time every month. Next, if you have credit cards, you need to make sure that the most that you are using of your available credit is less than 20%. Check your credit report for any inaccuracies and get them fixed.
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Pay them off quickly,the sooner you get credit card balances to $0.00.the better.
If you owe money on credit cards, pay more than the minimum. If you have many accounts with no balances, close some of them. Your total potential outstanding debt lowers your credit score. Pay all your bills on time.
Ther are many ways to fix credit score, but i will mention 2 ways.
1. Improve Your Credit By Paying Bills Later Rather Than Sooner.
Every business will get to the point where suppliers will offer terms on bills, rather than requiring payment up front or on delivery. Their bills will probably be marked “2/10, net 30.” This means you get a 2% discount if you pay within 10 days, and the bill is due within 30 days.
Many business owners will jump at the opportunity to save the 2% by paying early, and rightfully so. However, believe it or not, they can help their credit rating by paying at the end of 30 days.
How is this so? It’s all a matter of your business’ CREDIT HISTORY. All of the companies who offer you terms will be reporting your history to various credit bureaus. These bureaus are who gets consulted by banks when they decide whether or not to give you a loan.
By always taking advantage of the 2% discount, a business establishes a paying pattern. Thus, if you’ve been paying a company’s bills in 5 days for the past year, this is what they will expect from forthcoming bills. Now, say one month has a tighter cash flow than normal, and you must take 20 days to pay that bill. This sends up a red flag for the billing company.
You normally pay in 5 days, why are you now paying in 20? Even though you paid the bill well within the deadline, you have given a sign that you had a cash flow problem. This uneven paying pattern can show up on your credit rating. Even though all your bills are paid on time, an uneven paying pattern can jeopardize your future chances for more and larger credit limits.
Now, if you always pay your bills on the 25th day of the due period, even when you can pay them early, that cash poor month won’t look any different to the billing company. Most companies would rather grant terms to a company that always pays on the 25th day, than one that sometimes pays early, sometimes pays later, as this reflects an image of disorganization and uneven cash flow.
Also, always paying toward the end of the due period will aid your cash flow. If you pay your bills consistently, at the same time every month, you will not be surprised by a sudden cash shortage. For example, say you decide to pay a bill early one month. Then, the next week, your main supplier calls to tell you about a closeout deal he has that would double your profits.
Only problem is he can’t offer terms, it has to be cash. Because you paid that bill early, you can’t take advantage of the special deal. If you would have waited to pay it, your cash flow would have allowed the purchase, and the resulting higher profit margin would have yielded the cash to pay the bill.
So, you see, paying bills later, and not taking advantage of any early payment discounts, CAN work to your advantage. You need to consider your future plans and decide if saving 2% now is really worth it.
2.Establish AAA Credit In 30 Days
To work this plan you need at least $400 to begin. You should borrow this from your friends if necessary. Then go to a bank of your choice and deposit the $400 into a regular passbook savings account.
Wait a few days for the account to be posted and return to the bank to ask for a $400 loan – you offer the passbook as collateral. Since the bank is already holding your $400, you go to another bank open a savings account lending you another $400 and they won’t even make a credit check. Then, with your borrowed $400, you go to another bank, open a savings account, return a few days later, borrow $400 from that bank using your passbook as collateral.
Then repeat the process at a third bank with your borrowed $400. Wait a few days to go to a fourth bank where you open this time a CHECKING account. Wait a few days and make a payment on each of the other three loans. A week later, make payments again on the three loans, and continue paying each week until you have almost paid off the balance.
A credit investigation at this point will show you with three active bank loans (which are considered hard to get), a checking account, and a paying history for the three bank loans – with you having paid up in advance. Thus, you have AAA credit in as little as 30 days. From here you go on to apply for loans, credit cards, and other items on credit.
Apply for more credit cards. (Just don’t use them!)
If you continue paying your accounts on time, possibly reduce the amount on a credit card that is near its limit, etc should raise your score to 700 in no time. Also, if you have any negative accounts that are preparing to drop off your account. Have you received a copy of your credit report lately? If so look it over, you should be able to come up with some good ways of raising your score from it. Are there any accounts that do not belong to your or are in error? If so dispute. GOOD LUCK