Unless you’re a Hollywood rags-to-riches story, have won the lottery or inherited a fortune, buying a nice car, home, or other big-ticket item is hard without a good credit score. Just what is a good credit score?

Though what is considered a good credit score may differ with each lender, certain ranges are considered favorable to most lenders.

Also, your rating (another term for score) will often differ with each credit reporting bureau. This is partly because creditors do not always report to all the bureaus and partly because two of the bureaus have their own scoring criteria.

Since all bureaus might give you a different credit score, one should err on the safer side and go with the score that most lenders use.

The credit score that most lenders us is the FICO score. Only two companies offer this score, the originator of this system Fair Isaac Corporation and Equifax credit bureau. The websites to obtain your FICO score from MyFico and Equifax respectively.

Now, let’s take look at the different credit score ranges in order to have a better understanding of what constitutes a good score (or poor one for that matter).

FICO scores range from 300 (the lowest) to 850 (considered perfect). The higher your score, the more you’re considered less of a debt risk, and therefore worthy of the friendliest terms (read low interests rates and fees).

As with almost everything else, most people fall within the median range when it comes to credit ratings. The smallest number falls on either poor or perfect. Let’s break it down farther:

720 and above: This is considered great credit, and qualifies you for the best loans and interest rates. Lenders will be fighting over you, which is a good thing.

700 – 719: This is considered excellent credit. You might be able to get very good loans and interest rates, but there’s still room for improvement.

660 – 699: Good credit. You might qualify for good rates, depending on the lender and the strength of rest of your report. Still, you will probably not get the best interest rates.

620 – 659: Considered weak or border-line credit. The rest of your file needs to be very strong to get reasonable rates. Your interest rates will be higher and terms a little more stringent.

Below 620: This is considered poor credit. You may still get loans, but they will cost you. Most lenders will only lend to you if you have a cosigner. Terms might be very stringent for you.

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You’ve probably heard the saying “There’s no free lunch”. May be not some University of Illinois students.  Seeing an ad free a free sandwich at Subway on a certain day, a bunch of them responded (free hoagie, mmm…).

Free hoagie there was, okay. But you had to sign an application for a credit card…

Read the full story

Bad credit problem? No matter how bad your situation, there is hope. This article offers simple but effective steps towards quick credit repair.

Now, how fast you can fix your credit is relative. No two situations are alike, and there is no one size fits all. Your individual financial situation as well as your personal determination and efforts will all come to play. And, to be honest, credit repair does not work for everyone.

First, you need to know what is on your credit report. Get your credit report from all the three major credit reporting bureaus.

While you are at it, avoid free reports and, where possible, also avoid obtaining them online. I have explained the reason for this in other posts and will not repeat it here. If you already have a recent all-three-bureau report from, say, a mortgage company, you can use that.

You should also get your credit score from either FICO or Equifax (Only Equifax offers the real FICO among credit bureaus).

Why FICO score? Simple: Because it is the score that most lenders use. You want to be on the same page with most lenders.

The quickest way to fix your credit and begin to enjoy lower interest rates as well as qualify for loans and credit cards is by raising your score. Once your score is raised to a reasonable degree, you will be able to obtain more credit which will help improve your credit even more. 

Now, let’s start with the obvious. Begin to pay your bills on time. This factor alone accounts for the biggest chunk of your score. When you are late on a payment, you loose, big time. Do everything you can to avoid this, if it means robbing Peter to pay Paul.

Next, read through your report. Check for mistakes. There is a chance (some surveys put as one in three) of having erroneous information on your report. Look for inaccuracies in dates, names, balances, credit types, and any missing accounts that you pay on time.

You should also be on the lookout for duplicate reporting (that is, the same account getting reported more than once).

Once you’ve established that indeed errors do exist, you have three options. One option is to write to the bureau(s) whose report is in error and explain your position. If you have documents to prove your point the better; enclose them.

The second option is to utilize a rapid rescorer. Rapid rescorers are agencies that work as median between creditors and credit bureaus. As you may have guessed, their work is to speed up the rescoring process. Reputable rapid rescorers do not work directly with consumers; ask your creditor or mortgage company for this option.

The third option is to alert the creditor(s) about the error(s). This is much quicker than contacting the bureaus on your own, as creditors can correct errors at the push of a button.

You can also raise your credit score fast simply by reducing your debt. But, do not close any open accounts. Just pay down you debt to about 30 per cent of your balance, and you will see an almost instant raise score.

Alternatively, you could ask your bank raise your limit. You could also transfer money between accounts, so that none is at or near maximum.

One strategy that credit repair companies use is to dispute entries on reports. Once an entry has been disputed, it is must be taken off until verified. This is a strategy you can utilize yourself and avoid paying someone a hefty fee to do it for you.

When disputing credit report information, take care not to dispute accounts in good standing, or accounts that are open. You need those accounts to keep your credit history, and it also helps your score.

To repeat, unless an open account is a real thorn on your side, don’t close it, even if you’ve had late payments on it.

How does disputing credit accounts work? Well, it works on the premise that old archived accounts just might not be verified, or the creditor might find it not worth verifying.

But, disputing credit accounts may or may not work. For one, credit bureaus are well aware of this tactic, and may dismiss your request for verification on grounds of being “frivolous”.

Secondly, some creditors are very diligent, even vindictive, and will verify accounts at a speed that might surprise you. Believe me; I once saw an account for a very small amount get verified, and it was more than five years old!

The dispute strategy is worth a try, all the same.

If your objective is to reduce – or get out of debt – you could start by paying off some of them. Some experts recommend paying off the account(s) with the highest interest rate(s). This might not necessarily be the best way to go. Why?

Well, the credit card with the highest interest rate could also be the one with the biggest balance, as was once my case. If you start by paying that one of, you might not have enough to cover the rest of your debt. Also, if problems arise somewhere in the middle all your hard work could come to naught.

Perhaps a better way is to pay off the account with the lowest balance. This has a double positive effect. One debt is out of the way, and you are more motivated from the “win”.

But perhaps the best way for quick credit repair, bar none, is negotiating with your creditors and/or debt collectors. Not only can a creditor or collector remove negative items from your credit report, they can also give you breaks on some fees.

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Discover rights that you can use to your advantage and begin to clean up your credit file. Plus tips and tricks creditors and credit bureaus don’t want you to know. Check out the Credit Secrets Bible today!

Acknowledging that you do have bad credit is the first step towards repair. You have already taken that step, or you wouldn’t be reading this. Here are a few steps toward bad credit rating repair:

1. The biggest chunk of your credit score (or rating) depends on your payment history. This alone accounts for 35%. From here onwards, determine to pay your bills on time, if it means juggling them (using one account to pay another). In a few months, you will see an improvement.

2. If you don’t have open credit accounts, whether through bankruptcy or accounts getting closed, you need to open new accounts as soon as you possibly can. The easiest credit to get is secured type. This means depositing a sum of money ($500 or more), and then using that as collateral to get a line of credit. Start using it and pay back in full. You also take out a cash advance on that account and open another new account (known as piggy-backing). Just be sure that you can make the payments to avoid more credit problems.

3. Keep your balances low. 30% of your score is calculated on this. Keep your balances at 30% of your limit. Just by doing this you could see an almost immediate raise in your score. Just paying your bills on time (see No.1 above) and keeping your balances low could give your credit score a big boost.

4. Do NOT close your open accounts, even if you have had late payments. Why? Because those payments are helping you establish history. Some questionable credit repair companies will often dispute (or advice you to do so) all your accounts, including the good ones. This is a mistake. Once you dispute an account, it comes off your file until verified. Good accounts have less chance of getting verified. You could end with bad accounts getting back and good ones staying off! Length of credit history accounts for 15% of your score – another reason for keeping open accounts.

5. Avoid opening too many new accounts. Too many new accounts will increase the number of recent enquiries on your report, which dings your credit. Also, opening too many new credit accounts indicates higher risk.

6. Reduce your debt to manageable levels. Some credit “experts” advice first paying off high interest accounts. This is not necessarily the best way to go. More recent (less than two years old) bad accounts hurt your credit most. Deal with the more recent bad accounts first. And pay off the balances starting from the smallest and working upwards. Why? Well, if you start with the bigger balances, you might have problems somewhere in the middle, therefore ruining all your hard work.

7. Negotiate for removal of bad information. Yes, you can negotiate removal of negative items from your credit file as part of the deal. If the creditor or debt collector is reluctant is reluctant to remove your negative information altogether, you can request “re-aging” which simply means making the current month your first payment month, therefore not showing late payments. This subject could fill a book on its own.

Find out how to negotiate for removal of bad credit information plus credit repair tricks and strategies. Check out Credit Repair Bible now.