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I was in a rare fit of anger.

Last summer I got so mad at American Express, I closed a personal credit card account that I had just opened with them.

The lady I spoke with at Amex was a complete idiot…and clearly working in the wrong department. I thought I was talking to a person in

customer service…she obviously worked for the sales prevention unit.

It felt empowering when I told her to, “close the account,” and promptly hung up the phone.

Then I realized what I had just done…

Closing Credit Card Accounts is a Fast Track to Lowering Your FICO Credit Scores

You want to avoid closing credit card accounts at all costs.

If you want to do something to irritate the credit card companies—pay the account off with pennies…never carry a balance so that they

don’t earn any interest…pay your account in full and add a dollar to your payment so they have to send you a reimbursement check for a

dollar…anything to irritate them. Just don’t close your account!

Fortunately, I escaped without any significant damage to my credit scores. The account was so new that I wasn’t really getting anything Read more of this >>

Authorized User trade lines on your credit report will soon, no longer be factored into your FICO score model.

Becoming an authorized user (AU) on an established credit account that has a long and positive history has been effective for years in establishing good credit for your children, a stay at home spouse or significant other. The account holder could simply have a card issued to you and you would inherit the history of the account. The card holder could even keep the card in a sock drawer or cut it up. You, as the AU, would not have to use it even once. The AU would not be financially responsible for the debt if it were not a joint account. The only draw back was if the account holder missed payments, the AU report would reflect the 30, 60, 90 day late payments.

Well, this was one of the tools available to people to accelerate the increase of their credit score after a negative credit event. Probably not even a well known or often used tool, comparatively. It was, however, one of the methods that I have, for years, suggested to consumers as a way to increase scores or off set the bad items. Not to go out and rent someone’s credit for a fee (which is reportedly why this once useful avenue is being shut down). No, I would encourage people to network with their family and friends to look for a hand up, not a hand out. Read more of this >>

As unbelievable as it may sound, most consumers are not aware of what their credit score is. For as valuable a piece of information as that is, it is almost unthinkable for one not to know what their credit score is, or at least approximately what it is. You see, your credit score is used for much more than just deciding whether you should be approved for a new line of credit. It is also used today by many employers who are checking out a potential new employee, and also by some employers as part of the employee’s annual review to ensure that the employee is not digging himself into a financial hole outside of work hours. Your credit score is also starting to be used by car insurance companies to determine what rates you should pay, where their studies allegedly confirm that people with lower credit scores file more claims and for more frivolous items.

Sometimes a credit score is also referred to as a FICO score. The term FICO comes from the Fair Isaac Company and is the method that is preferred and used by most credit bureaus to calculate a credit score.

Credit scores range from a low of around 350 (very bad credit) to a high of around 850 (excellent credit). An average score is between 650 and 700, which is where most consumers would not have big problems in getting approved for a new account. But if your score falls below the 600 range, you are going to have difficulty in being approved, at least at prime lending rates, for a loan, credit card, or new line of credit because potential lenders will view you as being a higher risk.

One thing you should note is that you should check your credit report at least once a year from each of the three major credit bureaus. It should come as no surprise to learn that the majority of consumer and business credit reports contain errors and mistakes, Read more of this >>

Debt to income is a ratio of your total monthly debt payments to your total monthly income expressed as a ratio or percentage. It is a rather simple calculation but it can be deceiving unless you include all debt and all income in the calculation.

The calculation of your debt to income ratio is a straightforward one. You simply divide your total monthly debt payments by your total net income (that is your income after taxes). While some debt is unavoidable and may even be desirable for achieving your financial goals the real question is how much debt is too much; just where do you draw the line. Obtaining credit is often a function of a loan officer calculating the debt to income ration as a way of determining your ability to meet new obligations. Too high a debt to income ration will also have a negative impact on your FICO score, often making credit obtained more expensive than it needs to be. Below I suggest categories for inclusion in calculating your debt to income ratio to see where you stand.

Monthly Debt Payments to Consider: Read more of this >>

The Benefits are Amazing

The content of your credit report can have an enormous impact on the quality of your life. Your credit score will determine the cost of your mortgage, your automobile payments, and your credit cards. An improvement in your credit score could potentially save you thousands of dollars per year.

Overcoming Your Fear

It is normal to experience a degree of fear when the time comes to look at your credit report. Perhaps you have had some credit issues in the past. No one likes to be reminded of those times. I have spoken to thousands of people about their credit over the years. The majority of those people have felt some resistance to looking at their own reports. I understand! The credit bureaus can be intimidating. But like so many other things in life, once you get started it’s not so bad.

Getting Started Read more of this >>

Here are the top 7 questions we hear from consumers about credit reports and credit scores…

1. Will closing paid off credit card accounts improve my credit score?

This will surprise many of you, but closing paid off credit card accounts can actually hurt your score in two ways. In “Your Credit Score”, Liz Pulliam Weston explains:

A. Closing accounts can make your credit history look younger than it is. Your credit score factors in the age of your oldest account and the average age of all your accounts. So closing accounts, particularly older accounts can ding your score.

B. Closing accounts reduces the total credit available to you, making your debt utilization ratio soar. Remember that the FICO formula measures the gap between the credit you use and your total credit limits. The wider the gap, the better. If you suddenly lower that limit by shutting down accounts, the gap narrows – and that’s a bad thing.

2. What’s the best way to deal with a collection agency when you don’t have the money to pay them?

The Federal Fair Debt Collection Practices Act clearly states that you do not have to deal with credit or debt collectors. You can stop collectors from calling and writing with a “cease and desist” letter. This is short for “cease communication”. Once this letter is received by your collector, they will no longer be able to legally contact you by phone, at work, by fax, by certified mail, by nothing.

Of course, to improve your credit score, you will ultimately want to get the debt removed from your credit report by either getting the collector to agree to delete the item when you pay in full or by getting the credit bureau to delete the item. Read more of this >>

It used to be that “humans” decided your credit worthiness. For example, you knew your banker by name and your handshake was all the collateral you needed. Those days are long gone. Now a set of numbers – your FICO score – decides your credit worthiness and your banker may be thousands of miles away.

Although there are several credit models, the most commonly used is FICO, based on a model created by Fair, Isaac Company. Their consumer website is myfico.com, and you can find information about the FICO credit scores there.

Your FICO credit score controls your interest rate and how much credit a lender will give you. So taking care of your score, and keeping your credit clean will save you money.

Preserving your FICO score, and improving it, is not difficult, but it may take time. Despite the books, courses and consultants offering to help you improve your credit score, only 3 basic steps come into play. Here are the 3 steps everyone must use to earn, preserve and improve their score – based on three credit examples.

Step One: Obtain a Credit History

There are many reasons you may have no credit history. Maybe you’re just starting out, maybe you pay cash for everything and have never needed a loan. Anyway, if you have no credit history, your FICO score is likely to be low.

The easiest way to raise your score is to get a small loan, and pay it off on time. In general, installment loans carry more credibility than credit cards. In other words, you will improve your credit score faster if you buy goods with an installment loan, rather than getting a credit card.

Another way to earn a better credit history is to take $1000 and open a 6-month CD account at a financial institution. Now, get an installment loan for $1000, using that CD as collateral. Now, here’s the trick. Take the $1000 loan, and open another 6-month CD account at another institution. Take another loan for the $1000 at the second institution. Do this one more time.

Now what you have is 3 loans. Pay the minimum payment for 6 months. In the last month, cash out your CDs and pay the loans off. You now have a credit history, and did not go into long-term debt to get it.

Step Two: Preserve Your Good Credit History

Keep a stable source of income, pay your bills on time and avoid high credit card debt. Read more of this >>

Understanding the World of Credit Scores

Most people are not aware that most credit scores sold online are not the same credit scores that lenders use in making lending decisions. The score used by lenders is called the FICO score and it is the only score that counts. Unfortunately, the companies that sell non-FICO scores do not make it clear that these scores may vary widely from real FICO scores. Worse yet, the three credit bureaus that provide FICO scores to lenders are among the worse offenders in selling non-FICO scores to consumers!

One Score Three Names

The FICO score has been re-branded by each of the three bureaus for their own marketing, hence you will hear of three scores, although they are all driven by the same software. Equifax calls it a BEACON score, TransUnion calls it an EMPIRICA score, and Experian calls it the EXPERIAN/Fair Isaac Risk Model. The scores may be different because each bureau gathers information from a slightly different mix of creditors. If you look at your three reports you will notice that some accounts are missing on each bureau. Timing also plays a roll. A recent change in your credit may be picked up sooner at one bureau than another. You can purchase your real FICO score at MyFico.com.

Improve Your Credit Score Fast

So what makes your FICO score tick? And what can you do about it? Here are a few strategies that everyone involved in the credit repair process should know.

Check Your High Credit Limits

The relationship between your current balance and the available credit limit on your revolving accounts has a major impact on your credit score. Every revolving account on your report should be examined. If the high credit limit is understated send a dispute letter to each of the three credit bureaus asking them to update the information. If you have extra cash, pay down those balances and watch your score go up!

Increase Your High Credit Limits Read more of this >>

You Can manipulate your credit score……..

FICO score which is commonly referred to as your credit score will determine whether you are eligible to receive credit. It is also responsible for the type of terms and interest rates you will pay on that credit.

So…. Don’t be left in the dark when it comes to your credit score. Just a few points here or there can make a big difference on whether you are approved for that loan you are looking for.

Credit scores use to be a mystery to us all… Now we are all able to obtain copies of our own credit reports. There are 3 major agencies that do this reporting – Experian, Equifax & TransUnion. The information from each of these agencies is considered your financial history. While these reports don’t explain how your FICO score is computed — you can see in these reports what accounts you have and what is considered favorable or unfavorable to you.

Your FICO score is calculated from the credit reports of the 3 agencies. The areas that are important are;

• Payment History – 35% of your score.
• Existing Debt – 30% of your score
• Age of your Credit History – 15%
• New Credit / Inquiries – 10%
• Types of Credit – 10%

So – what can you do about your credit score? First off get a free report from each of the major agencies. You are entitled to a free report once every 12 months from each one of them. You can do this right on the internet and be able to download your report. You can do that is AnnualCreditReport.com

Take the time to go through each of these reports. You will see some information is different with each agency. Read more of this >>

“Ok, cut the bull” you say – you type in “best credit report” into google and you get back a million results! you just wont to know what the best credit report is and how to get one. Well to do this you just need to know exactly what you want – the best credit report for you may be one with a few additional services that give you a better picture of your report – there are services that include your credit score with your report, and other identity theft that come with your credit report, to get the full picture on what is the best credit report read on.

You may of heard of the website annualcreditreport.com from this website you can get your report from all 3 reporting agencies which will give you different score so you should get all three reports. Out of the 3 credit reporting agencies, Equifax is the only one that uses the a FICO score. Or you could get your FICO score directly form their website for around $8.

Some may advertise that you can get your credit report for free, this may be true but they will try and offer paid services on the path to obtaining the best credit report, these paid service are not necessarily bad but you need to know if these services will be useful to you , they could actually be very suitable for you so lets have a closer look at the best credit report , here is a list of services in addition to getting your report: Read more of this >>