Credit Repair Secrets Revealed!
What you don't know about your credit file "CAN" hurt you.
Brought to you by: Lang Smith, President of MIC Credit Repair http://www.myinformationcenter.com Email: LangSmith@myinformationcenter.com Office (912) 634-8194
ARTICLE 5
What causes sudden changes in your credit score? This is very common question but the answers are pretty much what you might think they are. Let’s talk about the obvious reasons first. The main reason for a sudden credit score change is going to be a late payment of any kind. Now, of course any negative item is going to change your score but a late payment is going to have an immediate negative effect on your credit score. A late payment, especially on a revolving credit account, is going to hit you the hardest. Just one late payment can cost you up to 100 points even if it is on something as simple as a power bill. This hardly seems fair but this is the world we live in and the system we have to put up with. The absolute best item you could place on your credit report is a revolving account in good standing. What do I mean by a “good standing” account? I mean pay your bill on time all the time. This will increase your score greatly in a very short period of time. Having two or three of these types of accounts will increase your score faster. However, keep in mind that they will destroy your credit the fastest as well if you choose to be late on these types of accounts. If you pay your bills on time, these accounts can only help you. If you don’t pay your bills on time, I wouldn’t suggest having any of these until you are capable of not being late. Your score will never increase if you are constantly late on anything. Another reason your score may suddenly drop is “Debt”. I have a lot of people calling me and emailing me with this question: “Lang, I don’t understand what is going on. My score has dropped 20 points in the last 2 weeks and I have done nothing different. I am paying all my bills on time. What is going on?” The answer to this question is simple. You are spending your available credit. You might be using your credit card to buy groceries or pay a bill. Whatever the case may be,
Page 2
if you spend your available credit, your score will drop. The closer you get to your high credit limit, the lower your score is going to go regardless of how many negative items are on your file. Let me give you an example… Most credit repair companies (Not Us) will lead you to believe that they can increase your score under any circumstance. If you have spoken to me or any of my staff ever, you will never hear them tell you such crap. I had a guy that we cleaned his credit perfectly. He had absolutely zero negative items on his credit report. Everything was great but his score was still below 600. There were two main problems with his credit reports at this point: 1. - Too much debt 2. - Not enough credit history Too much debt is what gets most people… When they hire a credit repair company to work their magic on their credit files, they are trained (mostly by the false information on the internet) that their score is going to go up if they just remove all the negative items. So what do they do? While they are getting their file worked on they are still spending more money and gathering more debt. This is hurting them completely when they should be paying off as much debt as possible to get the maximum credit score increase. Not enough credit history is crucial… Remember how people will tell you to pay your debts off and then your score will go up? Well this is true but it won’t stay up forever. Once you pay an account to 0, if you don’t plan on ever spending on that account again, that account is going to fall off your report in 7 years and will not help you after that point. This is the rest of the reason why this guy couldn’t get over a 600 on his credit files. All he had left on his file were accounts that were only about 2 years old. While 2 years is still pretty good, most creditors like to see 3, 5 or even 7 years of history on some accounts. So if you aren’t building more credit from the time you paid off your other accounts, this will actually hurt you in the long run. My advice to you is to spend about $10.00 on
Page 3
accounts with a long credit history just to keep them active so your score goes up and not down. Most people also believe you have to spend a lot of money and then pay it off to get good scores. No, that is wrong. You can do exactly what I just said and your score will increase. Bottom line is this: “When your long credit history drops off your credit score and you have not established any credit, your score is going to drop.” The older the credit is on your reports, the better your score is going to be. Anything past 7 years that is paid off is going to drop off your credit file. Keep this in mind if most of your credit is older credit and you have not established any new credit. Some people even believe that having no debts to pay is good for your score. This is not true either. Creditors like to see you can handle credit some responsibility but if you have no credit at all, this is actually worse then paying off your debts every month as you spend money. HINT: Don’t ever assume that paying off any one thing is going to increase your score any specific number of points. How much any one action will affect your credit score is impossible to tell. This is based on too many other factors. One of the most important lessons you could learn is this: GIVE IT TIME! Most people think that if they pay off their debts their score is going to improve immediately. This is only the case if you use a credit repair company that can actually do the job like my company. If you pay off debts but you still have negative items left your score might go up some but not that much. Credit repair is not a miracle cure and as a general rule, prepare to be involved in this process for several months. This can be a good thing for you though. Most people who are given something for free often abuse it many times over. If you have to work for something you will appreciate it that much more. With that said, if your credit files takes 6 months to repair as opposed to 1 month, you are less likely to mess it up in the future because you don’t want to have to go through 6 more months(or longer) of dealing with credit repair again.
Page 4 That is about all I have to say about this topic. I don’t want to give you too much information to the point you get confused. Be sure to watch out for article 6. This stuff is only going to get better and better for you.
For more information about credit repair and our services, visit us at: http://www.myinformationcenter.com Thank you for your time and I hope you keep this information close to you. To Your Freedom, Lang Smith, President MIC Credit Repair Office: (912) 634-8194