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101 Powerful Tips for
Legally
Improving Your Credit Score
Think Like a Lender
Page 2 of 2
Frequent job changes may
indicate - to some lenders - that you will simply disappear with
the money or default on a loan. Having a stable life - including
a longer-term job and one place of residence - may indicate to
lenders, on the other hand, that you are building up roots in a
place and so will be unlikely to move and default.
Tip #57: Avoid changing
switching credit companies and credit accounts a lot
Credit companies will often
offer you special introductory rates, generous free gifts or
other incentives to switch companies. However, you should
resist the temptation unless you have a reasonable reason to
switch. Establishing a good credit relationship with one company
- having one credit card from your college days, for example -
is a good way to show lenders that you are a steady sort of
person who is likely to take money matters seriously. That is
exactly what lenders want to see. Switching accounts and lenders
makes you appear fickle and less than reliable.
Tip #58: Keep your
records up to date
Not knowing what is going on
in your own financial life is courting disaster. Keep one file
folder in your home which contains your financial information -
and review this periodically. If something changes in your life
- you get married, you start a family, you move or change jobs,
look through your financial folder and contact everyone who
needs to be contacted to update them on the change. This will
help make sure that all your creditors have the information they
need about you. Keeping your own records up to date will help
you make sure that everyone who handles your finances is also
up-to-date.
Tip #59: Always be sure
that your creditors know your current address
If you move and forget to
inform all your creditors of your new address, you may not get
all your bills, making you look like a deadbeat debtor and
making your credit score plummet. Make sure that you either
close your credit accounts or get your new address and contact
information to your creditors.
When you move, make sure
that you inform credit card companies, stores you have credit
cards with, banks, credit unions, and anyone else you do
financial business with. Better yet, also arrange with the post
office to have your mail automatically forwarded to you at your
new address. This will ensure that any creditors you may have
overlooked will still be able to contact you - and you will have
a second chance to remind them of your address change.
Tip #60: Talk to lenders
and creditors
Many people are hesitant to
keep an open line of communication with their lenders because
they are embarrassed about their financial state or because they
feel unsure about the position.
Lenders can’t read your
mind, though. They do not know that you can’t make a payment
this month but will be able to make a double payment next month
because of a banking error. They simply see that you have failed
to make a payment - this may indicate a temporary problem or a
decision on your part to default on your loan.
Without your input, your
creditors have no way of knowing, and since their profits and
money are at risk, they tend to take the more conservative view
and even assume the worst. Keeping the lines of communication
open as soon as a problem develops can help reassure your
lenders and can help your creditors see that you are responsible
with their money.
Talking to lenders as soon
as a problem develops can be an effective way to prevent a ding
on your credit score that can affect your credit score. For
example, if you are giving trouble paying your bills, you can
often work out a more reasonable payment schedule.
In most cases, you will not
get a ding on your credit record if you do this because the
lender will have some assurance that your financial obligations
will still be met. In fact, one of the things that most credit
repair companies do is to arrange for more reasonable payment
schedules. With a simple phone call, you can do this for
yourself for no charge.
Lenders want, above all, to
be repaid so that their interest rates can earn them a profit.
By communicating whenever there is a problem and showing that
you are willing to work hard to meet your responsibilities, you
show your creditors that they will get their money and this
makes lenders more willing to work with you to ensure that your
credit rating is not badly affected by one missed or late
payment. Speaking with your creditors can help establish a good
working relationship that can help keep your credit rating in
good shape.
Tip #61: Get lenders to
waive late fees and charges
If you have missed some
payments or made some late payments, lenders will often charge
you a fee for non-payment. This not only adds insult to injury
- you have to pay more on your bills and get a ding on your
credit - but also makes bills more difficult to repay since the
bills are now higher. You can phone the lender and get the
charge waived in most cases, though. This is a secret that
credit repair companies have long known and is one of the first
services they will perform on your behalf. You can easily
accomplish this for yourself, however, at no cost.
Lenders want to get paid,
and if they think that you will pay your bill more quickly by
waiving the late fee, they will most often gladly remove the fee
in exchange for prompt payment.
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