Bad Credit Eliminated

Raise Your Credit Score Fast

If you need to raise your credit score fast, here are some strategies that can give your scores a quick boost.

Check Your Credit Reports

You can raise your credit score fast by having inaccurate information removed from your credit reports and keeping them accurate. The three major credit bureaus: Experian, TransUnion, and Equifax, are notorious for containing errors in credit reports.

Some errors, such as a misspelled name or out-of-date address, are not cause for concern, but should be corrected. Other mistakes can lower your credit score dramatically, so look for them. In order to raise your credit score fast, begin work immediately on having any inaccurate items on your credit report removed.

Look for accounts that do not belong to you and any outdated items remaining on your report which should have dropped off the report by now. Slow pays and late payments should only stay on your report for 7 years, collections for 7 years from the date of last activity, a foreclosure 7 years, and a Chapter 7 or Chapter 13 bankruptcy, 10 years.

You should dispute any mistakes and errors through the respective bureau. Send your dispute in writing stating that the entry is inaccurate and asking them to remove it. The credit bureau has up to 30 days to investigate your claim and make a decision to either remove the item from your report or to let it stand. They must notify you by mail of their decision.

Look at Your Credit Cards

Credit cards, if managed intelligently, can be a good way to raise your credit score fast. First, look at the balances on your cards. If one or more of your cards has a balance of more than 35% of your credit limit, this will have a negative impact on your credit score. A fast way to help improve your credit score is to pay the balance down below 35% of the high limit.

Piggybacking

Despite its’ virtually unlimited potential, piggybacking is not used by nearly as many consumers as it should be. It’s easy, effective, and extremely fast. Unfortunately, it’s mostly used among parents and siblings while those who can really benefit stay in the dark.

How it works. Almost every credit card or credit account will allow the primary account holder to add on (at a later date) what’s known as an “Authorized User” or “Secondary Account Holder”. In most cases, when this is done, the entire account history (retroactively) gets posted to the authorized users credit report regardless of their current age or credit history!

For example: If it’s a credit card with a $10,000 limit which has been paid as agreed for the last 10 years, then that complete history will be posted to the authorized users’ credit report.

In the end, we need to remember that today our credit score is more important than it has ever been in the history of the credit reporting system. While credit miracles don’t happen overnight, you can create your own credit miracles by applying simple insider strategies consistently overtime. Before you know it, you’re a proud member of the 700 Club. The “700Plus Credit Score” club that is.

If you want serious results in raising your credit score fast, this is all you will need.

Debt to Income Ratio – Knowing Yours Could Make a Difference

Your debt to income ratio is the relationship of your non-mortgage related debt to your gross monthly income. It is found by dividing non-mortgage related debts by the gross monthly income. The result is expressed as a percentage. When lenders are determining whether or not to extend credit, one of the key elements considered is your debt to income ratio.

An acceptable debt to income ratio, by most lenders’ standards, would be 35% or less. The lower the ratio, the less debt the borrower is carrying in relation to their income, and thus, the better equipped they are to take on more debt without causing a hardship.

To calculate your own debt to income ratio, first add up your monthly credit expenses. These would be payments toward student loans, credit cards, car payments, bank loans and so on. Do not include mortgage or rental payments, alimony or child support payments in this calculation. These items are reported separately on a credit application.

Next, determine your gross monthly income. Gross income is your income before any deductions are made.

To calculate your debt to income ratio then, divide your monthly debt by your monthly gross income. The result is your debt to income ratio. Below are some examples to better illustrate the calculations and how different ratios are ranked by lenders.

Debt to Income Ratio Examples

Example 1: Anglia A pays $250 on a car loan each month, plus $300 for student loans and $75 towards credit cards. Her monthly credit debts are $625.

Her gross income is $775 every two weeks. Since she is paid every two weeks, she must first determine her yearly income. Take the 26 paydays she receives annually and multiply that by her gross pay for each pay period (26 X $775 = $20,0150 annual gross income). To calculate her monthly income then, divide her annual income by 12 months ($20,150 divided by 12 = $1,679 monthly gross income).

To determine her debt to income ratio, she would divide her monthly debt ($625) by her monthly gross income ($1,679) which gives her a debt to income ratio of 37.2%. This is above what most lenders consider acceptable for the high end of debt to income ratio.

If your debt to income ratio is above 30%, be prepared to provide excellent documentation of your income and debts when applying for credit.

Example 2: Billy B has a gross monthly income of $3,500 a month. His monthly debts are $450 in car payments, $100 in credit card payments, and $70 for a personal loan. His total monthly credit debts are $620. By dividing his debt of $620 by his income of $3,500, he sees that his debt to income ratio is 17.7%.

Billy’s debt to income ratio is in an acceptable range and right around the average for most people.

The Credit Secrets Bible contains more information on debt to income ratio, as well as numerous guidelines on raising your credit scores fast.

I was asked recently about a foreclosure action by a homeowner’s association. The person had received a letter from their homeowner’s association saying they were filling a lien against her, and that she would be facing homeowner’s association foreclosure, because of unpaid dues.

She was already facing foreclosure from her bank and was confused about what was going on. She thought that only banks could foreclose.

So… here’s the deal. Homeowner’s associations incur expenses on behalf of the homeowner. The expenses could be from any number of things; like insurance, maintenance of the exterior, swimming pool maintenance, grounds keeping, parking lot upkeep, and so on.

If the homeowner doesn’t pay, the association has no other recourse than to file a lien against their property. If collection efforts on the lien fail to get resolved, the next step is for the association to foreclose on the property.

But the reality is this. . .

If the bank has already started foreclosure proceedings, it would be a waste of time and money for the association to actually begin additional foreclosure proceedings. The association would be at the end of the line in the “pecking order”, for priority in receiving a payoff from foreclosure.

The way that works is this; any loans or liens (except for unpaid taxes), that are junior to the loan that is foreclosing, would be wiped out when the mortgage holder foreclosed.

For example, if a property had the following loans and liens against it:

First Mortgage – $118,000
Second Mortgage – $25,000
Third Mortgage – $5,000
Mechanic’s Lien – $2,500
Property Taxes – $1,058

If the second mortgage holder foreclosed on the property, and a successful bid was made at auction, the winning bidder would have to take over the first mortgage because it is in a senior position to the second mortgage.

But, the third mortgage and the mechanic’s lien are junior to the second mortgage and would be wiped out by the foreclosure. Even though the tax lien is the most junior lien, property tax liens cannot be wiped out by foreclosure. So the winning bidder would be obligated for the past due taxes as well.

So what does all this mean to the lady asking the question? It means that the homeowner’s association is bluffing and hoping that she’ll pay the bill.