Credit Repair Tips and Reminders

Credit Repair Tips and Reminders

Credit Card (Photo credit: 401(K) 2013)

Credit Repair Tips and Reminders

This credit repair tips and reminders column is to recap some basics that all consumers should always bear in mind.  In my experience there is no question that comes up more often or that is more of a worry to consumers making a big effort to improve than this:

:  How Much Damage Does a Single Late Payment Do?

  • Single late payment.  The short answer is a single late payment does a lot of damage, especially in the near term.  Because a credit score is a compilation of different types of data, just how much damage will vary.  The higher your score was in the first place the more damage even one late payment will do.  For those with a high score the damage could be as much as 100 points for a period of time.  Those with a lesser score to start with will take a lesser hit.  If you miss a payment call the lender as soon as you can.  Make a promise to make it up as soon as you realistically know you can.  The lender may even waive the late fee if it’s your first time and you have a good record.  They don’t usually report it to the credit reporting agencies until it’s 30 days late.  If it’s already been reported ask for a good will deletion through a sincere letter.  They are allowed to do this occasionally and frequently will have a policy to allow it once a year.
  • Soft pulls.  are those credit checks made either by yourself or by someone else for reasons other than getting a loan such as a landlord or potential employer.  This category also includes pulls by a bank for purposes of opening a checking account or marketers such as credit card companies that are looking for prospects.  These pulls have no effect on your credit score unlike hard pulls which can cost you a few points with whichever credit reporting agency was used.  One pull by itself does “little to no damage to most credit scores” according to FICO’s web site.  2 or more will have an effect.  Statistics prove that those with 6 or more hard pulls or inquiries in a year are 8 times more likely to go bankrupt.  Hard pulls are those inquiries generated by loan applications
  • Pay before the credit card statement ending date.  Here is another one of the credit repair tips and reminders that bears repeating. Smart consumers realize that the balance reported to the credit agencies is the balance reported on the date on which the statement is closed.  The due date is irrelevant.  Check out when your monthly statement ends make sure you don’t run up any charges between the due date and the date on which the statement closes. This will give you a higher score by reducing your debt to available credit ratio.  This is not only perfectly legal and ethical it is the fastest way to make your score jump.  You have absolute control over this aspect of credit scoring.  You can put this segment of your credit profile in perfect shape before you apply for a loan.

Credit Repair Tips and Reminders Policy

My purpose here is to remind those who are a little rusty as well as to help newcomers to the credit scoring process.  My occasional credit repair tips and reminders columns are an attempt to bridge the gap between information that is of interest to advanced students of the credit scoring game with newcomers who are interested in advancing quickly.  If these columns are too easy or too hard look around the blog.  There is something for everyone.  There may come a time when I rate each column with a degree of difficulty.  I will think about that for the future.

 

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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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