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Insider Techniques to
Raise Your Credit Score...Fast
If there is one question I'm asked by
consumers more than any other about credit, it's this "What's the
fastest way to raise my credit score?". My response is always the
same "How much do you want to raise it?"
If you wish to increase your score from 580 to 650 then your
strategy will be very different from someone wanting
to go from 670 to 725. Why? Because you starting point is different
which requires a different approach. Also, while the removal of
negative items from a report will almost always lead to an increase
in score, it's a basic concept at best. Therefore, within this
article, we'll discuss somewhat inside techniques known by very few
(since this is what our company specializes in publishing).
In relation to just removing negative items, these are techniques
which you can use even if you have NO derogatory information on your
credit report. We'll start with the most overlooked strategy
first and that's your...
DEBT to CREDIT RATIO: The most fraudulent belief I've been hearing
for over 15 years is "I have excellent credit, I pay all my bills
off in full every month!" This is a false belief
for one to buy into and understanding your debt to credit ratio
holds the key to getting your "credit mindset" right.
Your debt to credit ratio is your ratio of debt to total available
credit you have been extended (revolving accounts only). For
example. If you have $10,000 in total unsecured revolving credit
accounts and you're currently in debt $2500, then your debt to
credit ratio is 25%. Since the main way lenders make money is by
charging interest, one of the elements of the credit scoring model
is driven by your ability to maintain balances and pay over time.
This shows your true (long term) credit worthiness which is most
profitable to lenders since they make money primarily via interest
and not
annual fees.
Over the years we've discovered without question that carrying the
proper debt to credit ratio will boost
your score faster than paying off your bills in full each month. I
have argued with the Better Business Bureau on this topic for and
they still disagree (despite my sending them proof
from Fair Isaacs own website, www.MyFico.com, the organization which
invented the credit scoring software
used by credit bureaus).
Of course, what do you do if you're like most Americans and your
debt to credit ratio is too high? For example. You have $10,000 in
unsecured revolving accounts but you owe $8500, thereby giving you
an 85% debt to credit ratio. How can you bring it down without
selling everything you own? The answer
is simple and takes us to the next technique which is...
SUB-PRIME MERCHANDISE CARDS: The single
most cost effective (and powerful) tool for consumers to increase
their high credit limit and decrease their debt to credit ratio is
the use of Sub-Prime Merchandise Cards which report to one of more
of the major credit bureaus.
Unfortunately, despite their immense benefits, these are the most
misunderstood cards in the credit industry. A large portion of the
misunderstanding is due to marketers misrepresenting the cards and
the growing number of companies promoting them. When you learn how
they work one quickly understands why they have been the subject of
much misrepresentation.
A Sub-Prime Merchandise Card is nothing more than a card attached to
a line of credit which allows you to buy
merchandise from a specific vendor (usually the company that sold
you the card). The merchandise (in most cases)
will be purchased through a catalog or online mall.
Where the problem arises is that the cards are marketed almost
exclusively to the sub prime market via email,
telemarketing and direct mail etc. The reason for this is they can
advertise almost irresistible offers like "$5,000
Credit Card... GUARANTEED! No Credit Check! NO Cosigner! You cannot
beturned down!" or "Unsecured $10,000 Credit Line! Everyone
Approved!". I'm sure you get the idea...
While there are many companies which do this and are a "shady at
best", there are a few which do it legitimately and it's the best
kept secret to build your credit and build it fast.
Here's how it works: the company approves anyone with a pulse
(literally) and gives them a card for $2,500 to $12,500 with NO
credit check and NO cosigner. However, the card is
only good for merchandise through their website or catalogs and the
consumer is required to put down a deposit on
whatever they purchase. After the deposit is paid, the remaining
balance is financed on the card.
For example. A person buys $1,000 worth of merchandise. Their
deposit is $300 so they then finance $700 on their
merchandise card and make payments. Sound like a scam? If you
say "Yes" like most people then you're missing
the point... big time.
With a legitimate Sub-Prime Merchandise Card your credit line WILL
be reported to at least one major credit bureau (or more). This
means if you get a $5,000 card and you finance
$500, on your credit report it will look like any other credit card
and will do three extremely important things for you.
1.) It will increase your current "High Credit Limit" by $5,000
almost overnight as the account "looks" like any other unsecured
revolving account.
2.) By carrying a small outstanding balance it will positively
impact your credit report by building and showing potential lenders
your credit worthiness.
3.) With a good payment history you are virtually guaranteed to
receive "legitimate" pre-approved credit offers in the future due to
other lenders renting your name from the credit bureaus.
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This technique is hard to beat for both cost and
effectiveness. Of course, the whole key is knowing
exactly which cards report to the credit bureau and offer the best rates. The
only thing more effective is...
PIGGYBACKING: Despite its virtually unlimited potential, piggybacking is not
used by nearly as many consumers as it should be. It's easy, effective, and
extremely fast. Unfortunately, it's mostly used among parents and siblings while
those who can really benefit stay in the dark.
How it works. Almost every credit card or credit account will allow the primary
account holder to add on (at a later date) what's known as an "Authorized User"
or "Secondary Account Holder". In most cases, when this is done, the entire
account history (retroactively) gets posted to the authorized users credit
report regardless of their current age or credit history!
For example. If it's a credit card with a $10,000 limit which has been paid as
agreed for the last 10 years, then that complete history will be posted to the
authorized users' credit report. I once saw a clients' credit report who used
this technique with his mother. He was only 24 at the time and he had a $15,000
Gold credit card on his report with history going back 11 years! I laughed as I
thought to myself that this kid would have had to be approved when he was 13
years old for this account to be his!
As you can see, this strategy is usually only used by parents and their children
and in most cases with no
regard to the benefits the children are reaping credit wise! In fact, in recent
years, due to its effectiveness, this technique has led individuals with
excellent credit scores to "rent out" authorized user accounts on one or even
multiple credit cards in return for a fee! I once recall seeing an ad in USA
TODAY for just such an opportunity. Like most good credit loopholes, I'm sure
this methods' days are numbered much like what may be the case with...
ADVANCED CREDIT PROFILING: This is a strategy while not complex, can be taken to
very complex levels. Even in
its' most basic form, it's taken advantage of by very, very few. It involves
intentionally building your credit report in a way which creates a "profile"
that closely fits the criteria of most lenders (as well as the overall credit
scoring system).
Again, this is a technique which can be used in a myriad of complex ways, but
for simplicity I will explain it in its most basic form.
While many consumers will boast when they have 10, 20, 30 or even 50 thousand
dollars worth of credit cards on their report, many of these same people do NOT
have even one mortgage, automotive loan or lease, equipment loan or a even a
line of credit with a local bank or credit union. These
other forms of credit create a much more well rounded credit profile for the
consumer. This is achieved by showing greater credit account diversity and
experience with multiple types of credit due to the various lines held.
For example. A person with $50K in credit cards does not represent near the
credit experience as a person with the same $50K along with a mortgage, an
automotive loan and an equipment lease. We have clients who have financed
vehicles not because they had to (or even wanted to) but because they "needed
to" in order to create a credit profile that would position them in the future
to secure the lowest possible rate on a mortgage when they applied and needed
it.
More complex forms of Advance Credit Profiling involve one subscribing to
affluent or semi-affluent business and professional publications and
organizations. These would include magazines, newsletters, trade journals and
national associations. The goal is to get ones name into the databases of these
publications and organizations.
Why? To get on highly targeted lists in order to receive select credit offers.
Marketers of credit offers have found that simply renting names of consumers
from the credit bureaus does not provide enough information about the person as
a credit risk anymore.
Therefore, it is speculated that many will rent a list from the credit bureau
and then cross-reference this list against another list they have secured from a
consumer source such as an affluent business or professional publication, trade
journal or organization.
By crossing the two lists together the marketers find the names contained on
both lists. This in turn provides them with one highly refined and targeted
list to mail their offer to. This results in shortening the process of securing
a new quality account holder thus lower the overall account acquisition cost of
new accounts.
When a consumer learns how to intentionally put themselves into these databases
to wind up on these refined lists, the credit building process is
sped up exponentially. Of course, many would call this "highly speculative" but
we have undeniable experience that it works.
DEPOSIT LOAN PROGRAMS: This is a technique so unbelievable that I myself
proclaimed it had to be a scam before researching the facts. It allows the
consumer (or business) to have a $25,000 to $250,000 loan appear on their credit
report as "Paid as Agreed" by way of very creative financing. This method
is extremely effective and not within the budget of most ($750 to $7,500
upfront). Also, because this technique takes advantage of certain
banking laws, I have reason to believe it could be made unavailable at any time
if those banking laws were to change. This method can be used with
consumer credit files on SSN's as well as business and corporate credit files
done on TIN's as well as Dunn and Bradstreet.
In the end, all of us need to remember that today our credit score is more
important than it has ever been in the history of the credit reporting system.
While credit miracles don't happen overnight, you can create your own credit
miracles by applying simple insider strategies consistently over time. Before
you know it, you're a proud member of the 700 Club. The "700 Plus Credit Score"
club that is!
In the next segment we'll talk about...
"Facts Consumers Should Know BEFORE
Using A Credit Counseling Service!"
by Terry Price
(C) Copyright Terry Price
All Rights Reserved
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The "CREDIT SECRETS BIBLE" has been in
print since 1994 and is published by
Consumer Publishing Group.
For more information on the "CREDIT
SECRETS BIBLE" you may visit:
http://grantmeric.niesong.hop.clickbank.net
=======================================
2008
(c) Live Oak Tree, LLC
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