10 Ways To Boost Your Credit Score

1. Deleting Errors in 48 Hours

This is the absolute fastest way to correct errors on your creditreport and raise your credit score. However, it can only be donethrough a mortgage company or a bank. If you apply for a homeloan and find errors on your credit report, request the loanofficer to conduct a Rapid Rescore. But don't mistake it for thecredit clinic tactic of multiple dispute letters.

The Rapid Rescore strategy requires proper paperwork. You needproof that the item is incorrect. It must come from the creditordirectly. For example, a letter stating the account is not youraccount, a letter stating the account was paid satisfactorily,a release of lien, a satisfaction of judgment, a bankruptcydischarge, a letter for deletion of collection account or anyrelevant evidence.

This is the same documentation a bank or mortgage company wouldrequire for the credit accounts anyways. The difference is, nowyou can improve your credit score and receive a lower interestrate. The results are not guaranteed and will run you about $50per account.

2. Deleting Negative Credit

This is the infamous area where you've heard of all the scams.Credit repair clinics charge "an arm and a leg" and promise aclean credit report. Sometimes even a new credit profile! Peoplespending hundreds, or even thousands, of dollars for somethingthey can do themselves.

Removing errors is simple. Deleting negative credit that isaccurate requires advanced methods. But that is not the scopeof this report. So I'll focus on the deleting the negativeerrors.

Credit report errors easily disappear by using a simple disputeletter. If you have the paperwork proving the error as mentionedabove in Rapid Rescore, send copies of that along with thedispute letter. This will make the credit bureau's job easier andyou will get faster results.

If you don't have the documentation to prove the error(s), sendthe dispute letter anyway. According to federal law, the creditbureau's have a "reasonable time" to validate your claim. Theywill contact the creditor for verification of your dispute. Thenthe account will be reported accurately - or deleted. It has beengenerally accepted the "reasonable time" to complete this task is30 days.

If you're not the do-it-yourself kind of person. Or don't havethe time. You could hire someone who is very economical.

3. PiggyBack Someone's Credit

This is a fast and great little credit score booster. But itrequires a very trusting relationship. Simply put, someone elseadds you to their credit account. For example, when applying fora credit card, you may have seen the section to add a card holder.If your trusting person adds you, their payment history is nowreported on your credit report too. If they have perfect credit,now you have a perfect account.

To make this more effective, use an aged account. Imagine if yourtrusted person has a 10 year old credit card account with aperfect payment history and a balance of only 50% of the creditlimit. Wouldn't you love to have this on your credit report? Theeasy part is your trusted person just calls the credit cardcompany and requests a form to add a cardholder. Once completedand activated, their entire account history and future is nowfirmly planted on your account. Imagine if you secured 3-5 ofthese accounts - especially installment accounts. Your creditscore could sky-rocket!

The challenging part? Finding the trusted person. Since you alreadyhave a low credit score and bad credit, how eager will someone beto make you a cardholder? Even your parents don't want you todamage their credit. But, no one says you need to possess the card!In other words, your trusted person could add you as a card holderand never give you the card or PIN or any information. Since thebills and all account information is still mailed to the trustedperson's address, you won't know anything about the account. Thisscenario could land you many trusted persons. And you still benefitwith a higher credit score.

4. Playing Round Robin

This strategy is one of the oldest credit building techniquesaround. It used to be accomplished with secured savings accounts.But now, it's much easier with secured credit cards. In fact,I've used this method myself.

Here's how it works: Take ,000 (or what you can afford) and geta secured credit card. Once received, get a cash advance of 70%of your credit limit. Get a second secured credit card. Oncereceived, get a cash advance of 70% of your credit limit. Get athird secured credit card. Once received, get a cash advance of70% of your credit limit.

Open a new checking account with the final cash advance. Use thisaccount only for making payments on your three new credit cards.If you make your payments on time every month, your credit scorewill increase because you now have three new perfect paymentcredit cards. (Initially, your credit score might drop a fewpoints due to the rapid, multiple accounts being opened. However,be patient because within 4 months of no new accounts or anydelinquencies of any account, you will see your credit scoreincrease. Mine increased 60 points in 60 days!!)

5. Pay on Time

This one is quite obvious. But after 12.5 years in the mortgagebusiness, I discovered it still needs repeating. Your creditorswere gracious enough to loan you money. Now pay your damn bills!If you don't, your credit score decreases. EVEN IF ONLY 30 DAYSLATE!

That's right folks. For some reason people think, "I'm only afew weeks late. What's the big deal?" Well, for the loan company,if you pay late but consistent, they make a lot more money withlate fees and more interest (if a simple interest loan). For you,your credit score is damaged. If you think long-term and creditscore, I'm certain you would not have a cavalier attitude.

6. Pay Down Debts

This seems like an obvious method, doesn't it? But it is not astransparent as you might think. Remember, we're playing withhigh-level statistics and probabilities which evaluates andforecasts trends in your behavior. Here's what you do...

Never pay off your revolving debt in it's entirety! Isn't that asurprise? Think about it. Your credit score is a reflection ofyour ability to manage your credit. Paying off your debt is notmanaging your debt. If you have a zero balance, how can you manageit? You don't. It no longer exists. And you cannot manage whatdoes not exist, right? Therefore, in terms of credit score, youhave demonstrated your ability to swiftly pay off accounts toavoid managing them. Thus, slightly decreasing your credit score.

One exception, of course, is if you're over extended to beginwith. Pay off what's necessary to make your credit profile lookgreat. Then manage the remaining credit.

7. Don't Close Accounts

Even if you pay off revolving debts, do not close the account.The longer an account is open with no negative reports, thebetter it reflects in your overall credit score. This is due tothe weighted-average in the credit score formula. Many creditexperts suggest a balance of 30% of your credit limit. That'sideal. But you can go as high as 70% and still maintain ahealthy credit score.

8. No New Credit

You must be vigilant in your credit behavior if you want the bestcredit score. Therefore, do not get any new credit unless it isabsolutely necessary. Each time you apply for credit, an inquiryis added to your report. This usually drops your credit scoreslightly. When you have fresh credit, there is no track recordhow you will manage (or pay) this account. Therefore, it's ahigher risk which results in a minor drop in your credit score.Remember, your credit score is about risk assessment.

Here's what you do: obtain credit for your housing, transportation,college or continued education and 3-5 credit cards. That's reallyall you need for personal credit. If you want more credit, requesta credit limit increase on your current cards rather than applyfor new ones.

9. Maintain A Mix of Credit Types

If you show you can handle different types of credit at the sametime, you are rewarded with a great credit score. In other words,get installment loans like vehicle, personal loan or mortgage.Get revolving credit like credit cards: Visa, Mastercard, Sears,Sunoco Gas, Costco. By mixing it up, you demonstrate you canmanage your credit because you will have short term and long termcredit with a fixed payment. As well as a "variable" monthlypayment on your credit cards.

Keep these accounts open with a balance of 70% or less and paidon time and you will witness your credit score climb to greatheights.

10. Don't File Bankruptcy or Foreclosure

Here's the most obvious advice: Don't file for bankruptcy orforeclosure. These stay on your credit report for 10 years andalways decrease your credit score. The older the bankruptcy orforeclosure account becomes, coupled with re-built credithistory, the less of an impact they play on your credit score.

Contrary to popular beliefs, you can legally delete a bankruptcyand foreclosure. It's not easy. But it's possible. See theadvanced methods for that solution.

To quickly rebuild your credit history after a bankruptcy orforeclosure, use the Round Robin strategy above and get securedcredit cards. Now you can even get a car loan or mortgage rightafter bankruptcy.

© 2004 David Czach.

-------- Editor's Note ----------

Dave Czach has 12 years experience in the mortgage business anda Bachelor's Degree in Real Estate. He can be reached athttp://myLoanHero.com/go.cgi/daveczach.

This article may be reprinted without compensation providedthere are no changes whatsoever to the article, the copyrightnotice and the complete Editor's Note. Any reprinting orduplication without these conditions is copyright infringement.

-------- Editor's Note ----------

-------- Editor's Note ----------

Dave Czach has 12 years experience in the mortgage business anda Bachelor's Degree in Real Estate. He can be reached athttp://myLoanHero.com/go.cgi/daveczach.