If you are in the process of repairing your credit report then you know how important your credit score is. This three digit number can determine your lifestyle more than by how much money you earn.
With a low credit score you may be getting turned away from jobs you are qualified for. You also are experiencing difficulty getting approval for car loans or credit cards. When you do receive approval it is with stomach churning interest rates.
If you know how the credit system works then you can use it to your advantage and increase your credit score. This will save you money that can be used for better purposes than paying high interest rates.
The credit bureaus use a mathematical equation to determine your credit score. The bureau puts your credit information into a computer and the computer spits out your credit score.
Your credit score is a way for lenders and employers to measure you. Lenders will often not look at any other factor other than your credit score when you apply for a credit line. You credit score determines how the credit world perceives you.
How do you use the credit system to your advantage? There are two factors that carry more weight than anything else in the credit system equation.
1. Remove negative accounts. Negative accounts on your credit report will do the most damage to your score and need to be removed.
2. Maintain an unsecured revolving line of credit. This is an easy technique that almost anyone can do.
The credit bureaus keep their equation confidential and do not release that information to the public. However upon review of thousands of credit files it has been discovered that having on open unsecured line of credit can be weighed as heavily as removing negative listings.
An unsecured credit line will increase your credit score because:
1. You are creating positive payment history with every month you pay your bill on time. Also credit bureaus like to see that this account has aged. Meaning it has been an open account for a while.
2. Helps your ratio of debt to available credit. This means the more credit you have that is not being used you score will be higher.
This credit line will carry more weight if it is unsecured such as a car loan or credit card. However if you are unable to get approval, then you should consider a secured credit card or a secured loan.
An open credit line will help you build credit but it is still very important to erase derogatory listings from your credit report. If you can not get an unsecured credit line and do not want a secured line of credit then remove the derogatory listings and reapply.
You can achieve a 700 credit score, no matter how bad your credit is today. Work on removing the negative listings and replacing those with positive listings.
To get a free credit repair letter to remove negative listings yourself or for more information about credit repair or to learn about lexington law a professional credit repair company visit us.
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