Immediate Credit Score Increase

  There are different strategies to raising a credit score.  The techniques vary based on whether there is an immediate necessity or you have a few months. 

To immediate raise a credit score, there are two major considerations:

• The amount of open revolving trade lines

• The credit ratio of these accounts.

  To have a credit score above 600 with the current FICO scoring system, you need at least three open revolving accounts.  An open account is a “paid as agreed” account from its inception.  Once you are more than 30 days late, it is no longer a “paid as agreed” account.  The account becomes a derogatory account.  It will remain a derogatory account as long as it is on your credit report.

  There are three types of revolving accounts:

• Bank credit cards (Capital One, Discover, and American Express etc.)

• Store credit cards (credit cards issued by a store that reports to the credit reporting agencies)

• Lines of Credit

  You can get a credit card in two to three days, if you have not had any problems with Orchard Bank.  If you do not have any open revolving trade lines, this will give you about 50 points.  The second credit card will give you approximately another 50 points. 

  Any activity to a trade line will not appear on your credit report until the creditors report it to the repository.  It is important that you use your new credit card and send a payment before the closing date on your statement.  After that date, the activity would not be sent to the repository until the next statement period.  This is very critical. 

  Points on any credit report are specific to the trade line makeup of each credit report.  For example, having five derogatory accounts with a risk impact of about 100 points does not mean having 10 derogatory accounts will produce a risk impact of 200 points.  The risk would be spread over the 10 accounts.  Now, if you had three open revolving accounts and a credit score of 625 and one of these accounts were 30 days late, your credit score would go down to about 525.  You receive deductions for the late and recently derogatory accounts, as well as for having too few open revolving accounts. 

  It would be to your advantage to contact the furnisher of information (the new name for the creditor) and politely request that the company remove the late payment status from your account.  If they will not, this account has become a derogatory account and will remain a derogatory account as long as it is on your credit report. 

  In my opinion, it would be better to pay off the balance and transfer the balance to another account with the same creditor.  Then, you should close the account.  When you close the account and are not making payments, the date of the last activity stops.  The statute currently allows the derogatory to remain on your credit report for seven years from the date of last activity.  When the date of last activity stops, the risk impact becomes less each month. 

  The quickest way to increase a credit score is to improve the credit ratio.  This is the ratio between the high limit that the creditor allows you and the balance reported to the repository.  Pay down the balance on your revolving accounts.  Obviously, the ideal balance is zero, but anything less that 25 percent is a minimum deduction.  The creditor must receive the payment before the statement closing date, as that is when the statement activity for that period is sent to the repository to be posted on your credit report.  High balances could reduce your credit score as much as 50 points or more for each account. 

  Another consideration is concentrating on the repository giving the lowest credit score.  A quick observation will show you if the highest credit score would be high enough to get you the mortgage if it were the middle score. 

  You will only need one point above the high score to make the high score the middle score.  First, you should determine the necessary number of points that will satisfy the lender.  Next, select the revolving trade lines that are causing the risk impact.  Generally, if you have sufficient open revolving trade lines, it is the credit ratio that is the problem.  This ration can be improved by paying down the balances or increasing the revolving trade line high limits. 

  Credit information continues to evolve.  The Federal Trade Commission, the repositories, FICO and the lenders are continually adjusting their criteria. 

Also, visit www.nationwidecreditrestoration.com/credit-score.htm for an illustration on credit score deductions.