30 day action steps to improve credit
Here is a brief guide to improve credit over the next 30 days with some simple ACTION steps. Follow these and you will be well on your way to taking control of your finances and improve credit. First, you need to correct any inaccuracies on your credit reports and check your personal information for inaccuracies such as your social security number, employer information or addresses. Next, review any negative credit information and correct the errors immediately. The credit reporting agencies have 30 days to investigate and respond to your inquiry. If they cannot verify the discrepency within 30 days, then they must remove it from your credit report. Also, avoid too many inquiries about your credit report because inquiries lower your credit score, and do not open up several credit cards at once.
Make sure you keep all your credit card balances under 35% of the total credit limit available. For example, if you have a $10,000 credit limit, then carry no more than a $3,500 balance. There are 3 ways to lower balances under 35%. You can ask your creditors to raise your credit limits, pay down your balances, or spread out the balances over all your cards to get below 35%. This will make a marked improvement in your credit score. Next, ask your creditor(s) to lower your interest rate(s). This will lower your payment and slow the accrual of your debt too, allowing you to pay it off sooner. Along with that, have your creditor(s) remove any fees, late fees or over limit fees etc. Every penny counts when you are trying to remove this albatross from around your neck and improve credit.
Also, pay every month and on time. Paying on time with no missed payments for 6-12 months will raise your credit score. Once you have acheived this good payment record call the creditors and request removal of delinquent information because deleting negative items will immediately raise your credit score. If you are currently in collections and can pay nearly all or all of your debt, some creditors will delete the collections from your report. Not having collection(s) activity on your credit report is a big boost to your score. Once you do all of these actions you need to make sure that you monitor your credit history or use a credit monitoring service to do so. These simple steps are well within your reach, and if you follow the concepts and guidelines outlined here you could have glowing credit in 30 days! Go through the process and do little steps everyday to reach your goal to improve credit because the benefits will be rewarding and lasting.
Understanding credit and the forces working against you will help you improve credit
Before you can understand how to improve credit, you must first know what credit is and how it really works. Credit is simply receiving something of value from a lender and agreeing to repay in the future. Often times, a contractual instrument is written and executed to hold the lender and borrower accountable to the terms of the contract. If the loan is not repaid, then a breach of contract and default occur, and the borrower is subject to the terms and penalties of the contract.
Before the technological revolution, lenders and borrowers tended to know one another and lenders knew more about whom they were lending to. Now, borrowers and lenders are mere shadows in the night and remain faceless. Credit issuance is based on pertinent facts about the borrower which usually go unverified. Technology shields the borrower from the lender and vice versa. Credit defaults are becoming the norm in our bubble economy, where most borrowers do not even realize or care whether or not they will be able to repay the loan.
Our society is gripped with instant self gratification at the expense of serious future ramifications. Why and how did this happen? I believe the why comes from a tainted political system where reelection is all that matters, and is funded by wall street in return for regulatory favors which in turn have created too many boom-bust cycles in the last 15 years. If 4-year term limits were put into law this would stifle the why. The how, I believe, has been a slow and deceptive process through easier credit to the masses over a 20 year period. Instead of living within our means, the new norm is to live outside of our means. Bankruptcy is no longer a nasty word and has become a viable option, dare I say, a means to an end without considering the repercussions. Accountability for your actions and your good name are not held in high esteem. The boom-bust cycles continue to increase in frequency and scale. The last, almost led to a catastrophic meltdown of the United States financial system.
What must happen to correct our credit woes and improve credit? Government regulation, term limits for elected officials and personal accountability. All of us must live within our means, save more, and only use revolving credit as a convenience and not a bank account. If you have a burning desire to improve credit, then you must go back to the basics of sound money management. If you do not have the money to pay for it, then it is a want and not a need, unless something with measurable intrinsic value is purchased and will offer a return of principal and a return on investment in the future. Sound financial principles should be the norm and a means to an end to improve credit.
