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Because
your credit rating is based on your actual history of borrowing
and repaying money, there's no way to instantly boost it.
Nevertheless, several simple measures will help you strengthen
your credit over time:
- Make
all of your payments on time.
- If
at all possible, never let an account become more
than one payment past due.
- Learn
what's on your credit report.
- Continue
to check your credit report regularly, and correct
inaccuracies as soon as possible.
- To
minimize the number of inquiries on your credit report,
don't apply for multiple credit cards over a short
period of time, or for a card you're not likely to
get.
- In
general, try to keep your total account balance below
75 percent of your total available credit. For instance,
if your cards have a total credit limit of $2,000,
keep your total balance under $1,500.
- Close
accounts you don't need. To a lender, a high total
credit limit signals potential overextension. At the
same time, lenders want to see that you can maintain
more than one account at a time. A total of three
or four cards -- which may include gasoline or department
store cards -- is usually good.
- If
your credit is severely damaged or you have a very
short credit history, apply for a gasoline credit
card, a department store card, or a secured credit
card. Use the cards, and pay the balances in a timely
matter.
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Are
credit repair companies worth the money?
Many advertisements on television, in newspapers, and on the
Internet promise to correct a bad credit file for a fee. Such
companies promise to erase negative information -- even a
bankruptcy -- from your credit report. But in fact, negative
information may be legally removed from your credit report
only if it is inaccurate or if the 7- to 10-year reporting
period has expired. In most cases, consumers willing to spend
the necessary time and effort can do everything credit repair
companies can do, for much less money.
If
you've already enlisted the services of a credit repair company,
you're protected under the Credit Repair Organizations Act.
Among other provisions, the CROA requires credit repair companies
not to charge you until they've delivered the promised services.
You have the right to sue any company that violates the act.
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