25 Awesome Credit Hacks
Boost and maintain your credit score with these great Credit Hacks!
Establishing Credit
Credit cards can be risky because everything you buy automatically costs more if you don't pay off the entire sum each month. Similar to how loans for things like cars nearly always have interest charges, you end up paying more than the item is worth.
It is never advisable to pay for products that lose value with a loan or credit.
If you exclusively use credit and loans to buy non-depreciating items, you won't ever pay more than necessary for anything, you'll keep your credit utilisation low, and you won't make purchases you won't be able to pay back right away.
Do you want to enhance your credit score and are wondering how many credit cards you should maintain? To be honest, the credit score algorithm is somewhat subjective because it takes into account so many different variables.
The best outcomes, though, come from having at least three active major credit cards.
You don't have to use all three credit cards on a regular basis. Use at least one of these well-known credit cards frequently, but avoid carrying a big load.
You may gain credit for paying your phone and utilities bills on time by using Experian BoostTM. If qualified payments are found, the process only takes a few minutes, and you can add this good information to your Experian credit file. (Don't worry; whatever poor grades you may have won't be used against you.)
Experian Boost has raised FICO® Scores by over 10 million points nationwide since its introduction. New potential credit ratings are immediately effective and are completely free.
An essential initial step in establishing your credit file is opening new accounts that will be reported to the three major credit bureaus, which include all three of the largest lenders and card issuers. Having at least a few open and active credit accounts can be beneficial because you can't begin building a solid borrowing history unless you have accounts in your name.
If you're just starting out or have a low score, these can be secured cards or credit-builder loans; if you're looking to raise an already high score, they might be terrific rewards cards with no annual charge. If they use the card responsibly, having yourself enrolled as an authorized user on someone else's credit card might also be beneficial.
Additionally, you can enroll in Experian Boost™ to have utility, cellphone, and streaming service payments reported favorably on your credit report. If you use Boost, these timely payments will now be taken into account when calculating your Experian credit scores, which they wouldn't normally be.
Try to move up to an unsecured card after a few months of on-time payments. Since they're frequently simpler to qualify for, department store cards are a smart place to start. In six to twelve months, consider applying for a conventional bank credit card by paying your balance in full and on time each month.
It may actually lower your score if you try to open numerous accounts quickly just to enhance your available credit .
A co-signer or guarantor is effectively pledging to take on responsibility for the debt if you default, so having a co-signer or guarantor with strong credit can go a long way toward helping you qualify for credit.
However, it might be challenging to locate someone to serve as your co-signer or guarantor because of the high level of risk involved.
Improving Credit
According to the Federal Trade Commission, as many as 5% of consumers have errors on their credit reports. It’s your responsibility to make sure these get addressed because believe me, nobody else will.
You can request free copies of your credit report from Equifax, TransUnion, and Experian. Check each one over carefully for mistakes, including purchases you didn’t make, unpaid balances, and multiple entries for the same item. Report errors straight away.
You can also get a free copy of your credit report by signing up for Experian Boost. The service is free and is among the fastest ways to increase your score. You’ll simply provide bank account information and start getting credit for paying bills like your electricity, gas, and water on time each month. On average, customers see a 13-point FICO score boost with Experian Boost.
If you have any errors on your credit report that are bringing your score down, such as credit inquiries you did not authorize or derogatory items that don’t belong to you, then this hack could definitely give your credit a boost.
First, you need to obtain a copy of your credit report to check for errors. You can order one from each of the three credit bureaus for free once a year at annualcreditreport.com and you can order your Innovis credit report for free directly from their website.
Then, thoroughly check your credit report for any inaccuracies, such as late payments that you actually made on time, duplicate accounts, or derogatory information that is more than seven years old (which means it should have been deleted by the credit bureaus already).
To fix the errors on your credit report, you can dispute the items with the credit bureaus by following the instructions found on each of your credit reports. However, there are a couple of other things you should keep in mind in order to ensure your dispute process goes smoothly.
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- Look up a sample credit dispute letter, such as the sample letter offered by the Federal Trade Commission, that you can use as a model for writing your own letters.
- Write one dispute letter for each credit report error and send in your letters one at a time. If you try to dispute several items at once, you run the risk of the claim being dismissed as “frivolous.”
- Be sure to include as much evidence as possible that supports your claim when submitting your dispute. Without documentation proving that the item is being reported incorrectly, the credit bureaus could dismiss your dispute.
- Send your letters along with the necessary documentation via certified mail so that you can get proof that the bureaus received them.
- In addition, you should also talk to the creditor that is reporting the inaccurate date to the credit bureaus in order to fix the problem at the source and prevent the error from showing up on your credit report again in the future.
Once the credit bureaus receive your dispute letters, they have 30 days to investigate the issue. If they cannot verify the information to be accurate, then they have to either update the item with the correct information or remove the item from your credit report.
For more information on the types of credit report errors to watch out for and how to fix them, see “How to Fix the Most Common Credit Report Errors.”
There are credit hacks which can enable business owners to remove accounts in collections from their credit reports.
Entrepreneurial borrowers' worst nightmare is collection accounts. The collection is frequently unknown to new business owners until after they have applied for credit. A collections account still has an impact on a credit report for an additional seven (7) years after it is paid, which fuels the fire further.
The solution to credit repair is to Pay and Delete.
An arrangement known as "pay and delete" is made between a debtor (you, the business owner), a third party bill collector, and the bill collector. The bill collector agrees to remove the collections mark from your credit report in exchange for payment of the past-due debt. It is simple, but since collection agencies won't offer to pay and erase, you must request that they do it.
The paid collection remains on your credit record for seven (7) years from the date of payment if you choose not to ask for payment and deletion. An account with paid collections is preferable to one with active collections. Nevertheless, the paid collection account hurts your credit score for at least two years, even if it was only a few dollars. You could pay to lower your credit score without pay and delete.
Before making a payment on a debt, always request a written Pay and Delete agreement from the collection agency. Make sure to keep a copy of that writing. If the collection agency fails to delete the collection account from your credit report, this will support you in a future credit bureau dispute.
Your perceived creditworthiness can increase if you have both revolving credit (such as loans and credit cards) and installment accounts. So, consider obtaining the form of credit you don't have to diversify your credit portfolio if you only have loans or credit cards.