Wealth, Health, and Success

Your Credit is Your Reputation

If you didn't read another chapter. This is the critical subject until there is major reformation in American economics and finances. Your credit score determines your eligibility to loans, careers, and extra income. Credit is important if the current situation or income level doesn't permit you to make major purchases cash. If you cannot currently get a loan for college or receive a mortgage for a house this is a great book for you.

Many of us struggle to maneuver through this system because of our debt and credit. However, these can become extremely beneficial. In fact, these create the fake rich life most aspire toward. There are people who look rich, but they avoid taxes, have mountains of debts, and somehow have an infinite credit limit to live their lives. Whiles others are crushed unable to buy groceries because their $500 credit limit is maxed out and they have a week until payday.

I seek to lift the boots of disparity from the necks of the downtrodden working class. I pray I can shut down the Ponzi credit repair specialists who charge astronomical amounts to lie about identity theft and abuse the credit bureaus. Yes, you can completely dispute accounts you 100% legally owe or create a fake identity through EIN or CPN. You could also go to jail or be fined for these unethical methods. I am not one of these people trying to get rich off your misfortune. Let's learn an honest way to fortune.

I am not going to cover the history of credit in this article. My goal is to make you your own specialist in credit. To prepare you for a lifetime of good credit and actively fix your credit score! This way you wouldn't need to pay $500 to a specialist that could have gone to pay off your debts.

What is your credit score composed of truly? If you have anything below an 800 score, you'll quickly see why your credit score is a 700, 600 or 500. It's easy to feel overwhelmed or controlled by your credit score without proper information but information creates clarity and creativity. Understanding what composes your credit score will show you the areas you need to work on.

35% of your credit score is your credit history for the past 120 days to 7 years. A perfect score is 850. If you have a poor payment history or new accounts, then you're missing 297.5 points setting you back to a 552.5 score off the rip. To counter this then you need to call your creditors to arrange a sensible payment plan. Or voluntarily pay the minimum amount for several months to move back into positive standing. For these nearly 300 points you don't need to pay off all your debts. You need to maintain a good standing by paying something and remaining in clear communication with your creditors.

The next major section covers your credit utilization over your credit limit. This covers 30% of your score or 255 points. If you have maxed out your credit cards your score will be maxed out around 600 points. It's important to pay your bills before they are due first and foremost to avoid interest. The strategy for this area is to pay off your bill before it's reported to the credit bureaus or keep your utilization below 10-30% of your limit.

I want to focus on Credit History and Credit Utilization since these could tackle you down to a 300-credit score.

First, it usually takes about 5-9 months to get in good standing with your creditors. Focus only on the minimum payments to get back into good standing and reduce your utilization. You want to pay your bills before the 15th when your bill is typically issued. You want to attack this before you receive the bill and before they can apply interest. This will report your utilization at its amount after you've paid your bills.

Second, the best habit you can develop is to pay off your bills in FULL! Then you will never have to worry about your interest rate. This will also report your credit utilization at zero if done before the 15th which will secure those 255 points over a few months of this technique.

Third, a personal pet peeve honestly... you do not want to remove these from your record because it can negatively affect your credit history! Many of these fake specialists try to hide credit evidence by demanding for deletion. This makes them feel as if they accomplished something but if this was an older account you WILL lose points instead of gaining them. You may want to close the account or best to settle the account in good standing.