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101 Powerful Tips for
Legally
Improving Your Credit Score
Think Like a Lender
Page 1 of 2
If you think like a lender,
you can see which habits and traits you need to develop in order
to be considered a good credit risk. Thinking like a lender
will help you understand how you must manage your money to be
appealing to lenders. There are few tips that can put you into
the right mind set:
Tip #52: Know how money
works
Reading books about money
and understanding how your accounts and loans work can go a long
way towards helping you keep your credit in good repair. For
example, if you know that some loans will charge you extra if
you pay off your loan faster while others will not, you will be
in a batter position to make financial decisions.
Plus, the more you know
about money in general, the more comfortable you will feel with
it and the better decisions you will be able to make, which will
help improve your overall financial state and will help you keep
your credit in good shape.
You don’t need to do
heavy-duty research to appreciate how money works. One easy way
to consider money is to think of it the way you think of time.
You likely hate to waste time and you want to make the best use
of it possible. Apply the same attitudes to your financial life
and watch your finances soar!
If overspending has caused
you to have a bad credit score, consider the following sneaky
mind set trick: equate your money with your time. For example,
if you make twenty dollars an hour, then a magazine subscription
of $20 will represent one hour of your work.
Imagine an hour of your work
and ask yourself whether the subscription is worth the time you
put into the twenty dollars. Once you start seeing money as
something that comes from your hard work rather than a general
“thing” impulse spending will seem much less attractive, and it
will be easier to keep your credit card limits low and you bank
account stocked up with cash!
Tip #53: Take care of
those things besides a credit score that affect how lenders view
you
Lenders will often look at
not only your credit score but at other financial indicators,
such as your income, employment record, and savings. Keeping
these things in order can complement your credit score and can
help you get good overall credit. Some lenders have their own
ways of calculating credit scores, so keeping your overall
financial system in good shape is one way to ensure that you are
in good shape in all lenders’ eyes.
Be aware that when lender
ask to see your credit score, the credit bureaus send not only
your credit score, but also the top four reasons why your credit
score is lowered. The most common reasons for lowered credit
scores are:
1) Serious delinquency in
repaying accounts or bills.
2) Public record of
bankruptcy, civil judgment, or report to a collection agency
3) Recent unpaid or late
paid debts or accounts
4) Short-term credit record
5) Lots of new accounts
6) Many accounts have late
payments, defaults, or non-payments
7) Large debts or amounts
owed.
Knowing that your lender
sees these possible problems can help you see the need to
develop the best possible face to present to a lender. Lenders
who look at your entire credit report may get a more positive
picture of you than lenders who see only a number and four
reasons for a lower score.
Tip #54: Follow up on
closed accounts
You closed a store card
years ago - but is it still listed as an open account?
Bureaucratic mix-ups happen, often quite frequently. If you
want to keep your credit score good, you need to follow up on
financial details.
Whenever you close an
account - whether it’s a credit account, bank account, or
utility company account, make sure that you get written
confirmation that the account is closed and paid in full and
then follow up a few months later with the company to confirm
the closed account. This simple precaution can save you hours
of frustration - not to mention a lowered credit
score.
Tip #55: Don’t move
around a lot
Lenders like to see
stability - it suggests stability in financial matters as well
as in your life, and makes you a better credit risk. Plus,
every time you move, you may have to change your credit
information - including switching banks. This actually
negatively affects your credit score by not allowing you to
develop long-term relationships with lenders.
Remember: Your current and
past addresses are listed on your credit report even if they do
not directly affect your credit score. Any lender looking at
your full credit report will be pleased to see that you create a
stable life for yourself. Not moving too frequently can also
save you money on moving costs, which can add up quite quickly.
Tip #56: Don’t change
jobs frequently
Of course, there will be
times when you will have to change jobs. However, avoiding
changing jobs unnecessarily will help improve your credit score
by allowing you to stay in one place and build a steady
financial situation.
Your credit report also
shows your current and past jobs - if a lender sees that you
change jobs frequently, he or she may wonder whether you have
the life stability required to handle debt responsibilities.
Also, the lender cannot see why you left a job. If there are
many employers listed on your credit report, the lender may
wonder whether you have not been fired from jobs and whether
that is an indication that you will be unable to pay your debts
due to unemployment at some point in the future.
A lender makes their money
by the interest charged on a loan. If you default on a loan,
you cause the lender to lose money. Above all, the lender wants
to see evidence in your credit record that you have the traits
that will make you repay the loan - with interest.
>>> Page 2
Debt Relief News MSN
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