If you have been through a rough patch and your credit was hurt, there is good news. Some recent changes in the FICO scoring model make it easier than ever to get your credit back in awesome shape. Here are a few of the highlights, and some may take you by surprise.
FICO Forgiveness. It is About Time.
If you take even a small step towards rebuilding your credit, your scores will go up faster now than ever before, and probably faster than you would believe. FICO, it seems, is eager to let bygones be bygones and to reward consumers for getting back on the credit horse.
For most people, secured credit cards are the way to get things rolling, and carry a potential payoff of 100 extra points on your score within six months of showing up on your credit report. Just read the next section and make sure to do it right.
The Inverse Credit Card Trick
Credit cards these days are a make or break proposition. If you run a credit card balance up near the max, your score will take a huge hit. How huge? Depending on what else is on your report, it can exceed a frightening 100 points.
Inversely, if your balances are high and you pay them down below twenty percent of the available credit line your scores will soar – instantly – the very second the reduced balance is reported to the credit bureaus.
So, if you are ready to rebuild and want the big payoff from opening new accounts, use your cards, but keep those balances down.
Are You Seeing Double?
If you look at your credit report and notice the same collection reporting multiple times with different names, you may have a quick fix available. Collectors are supposed to remove collections from your report when they sell the debt to another collector. Sadly, they often don’t.
The good news is that these lingering sold collections are almost always zero-resistance fixes. Just dispute them and they will go away. For someone with several of these sold collections, clearing them up can result in a major credit score increase; like found treasure!
Go Time.
If you are ready to take that first step, the wind is at your back right now. If you want some help, we are happy to chat. Good luck!