How to Improve your credit , the easy way...

While talking to a friend of mine about our credit score I found that even though she and her husband had always tried to keep their credit score in a higher bracket, they had dropped below what is considered "good" because of a late payment on some bills. It wasn't because they didn't have the money but because she was hospitalized and during this time the bills were forgotten. Even though they explained why the bills were late it still caused their credit score to drop. The credit score companies don't accept excuses.

So I suggested that they take out a small loan at their bank.
She cocked her head to one side, gave me a strange look, then asked, "Now why would we want to do that? We don't need a loan."

Okay I guess you are wondering why I said that too. Well let me explain...
When you borrow money from a bank and pay off the loan before it is due, they report your prompt payment and it raises your credit score.

But what if you don't have any money to spare and your bank wont give you a loan? Here is what you can do...

Borrow, beg or sell something worth at least $50, $100 if at all possible.
Open up a savings account with this money then use it as collateral to secure a loan from the bank. Either the same amount you have in the account or less. Never ask for a loan that is more than what you have in the account. Just before the payment on the loan is due you use the money in the savings account to pay it off. Do this at another bank, and another until your credit score reaches the excellent mark. No doubt you will now be able to secure a loan with almost any bank without any collateral, as long as it is a reasonable amount. Never take out a loan of any size if you can't make the payments on time.

Student Credit Cards, Establishing Good Credit

How Can a College Student Establish Good Credit?

Establishing credit is usually easier than you think. First, we are assuming that you're a fresh college student looking for your first credit card. This is a great step to establishing credit But you should learn more about how they can work against you as well as how they can help you establish good credit.

Once you finally find that card you want and they approve you, make sure you don't rack up too much debt too quickly. This will raise a red flag and your credit may suffer. Sometimes students get in over their head and they're not able to make a payment. It's best if you keep a low balance and you will want to make your minimum payments on time each month, there's no exceptions to this. It's even better if you can make the full payment. This will prevent you from having to pay the interest credit card issuers charge. If you miss one payment, it can kill your FICO score!
And may even raise your interest rate.

Know how much you can pay each month before even applying for a card then stick with that amount. Being a responsible and sensible spender will help raise your credit score and your credit limit. Some students start with a pre paid card then switch to the "loan" card after they have worked out a budget to include a credit card payment. Try to never go over your allotted amount.

Don't fret if you get turned down on your first application, even people with established credit face rejection sometimes. Just apply again. There is more than one credit card issuer out there.

Don't know what credit card is best for you?
You can find the credit card that best fits your needs here...

Help Me choose the right Credit Card

What credit card can you get?

Before you apply for a Credit Card you should know your credit score.
This will help you in knowing which card you can get with the best APR.
Even if you do have to pay an annual fee it may be better than having to pay a high
interest rate. Knowing which card you can apply for will be a great help in your
decision.
What Credit Card can you get today?
Find out by clicking on your credit score.

*Excellent (750+)
*Good Credit (700-749)
*Fair Credit (650-699)
*Poor Credit (600-649)
*Bad Credit (Below 599)
*No Credit

Credit Cards and Credit Score

Tips to give your credit score an extra boost.

1. Keep the balances balanced
Maintaining a balance that's close to your limit could weigh down your credit score.
If you carry a balance on your credit card, you need to make sure the difference between your credit limit and your balance is 50 percent or less, so if your limit is $1,000, you need to keep your balance at $500 or less. Not using all of your credit is a signal to card companies that you're managing your credit properly. Keeping an even lower balance - 30 percent or less - will boost your score even more. Should your balance go over the 50 percent mark on one card, you need to focus any available financial resources on cutting the balance down, even if it means sacrificing a few daily luxuries until the credit's in check.

2. Eliminate the mistakes
One of the fastest ways to up your score is to make sure it's yours. According to a 2005 study by the Federal Trade Commission, an estimated 8.3 million Americans are victims of identity theft each year. Of those victims, 1.8 million have new credit cards, loans, or financial accounts opened in their name without their knowledge.

An easy way to prevent paying off debts you didn't incur is to keep tabs on your credit score through agencies like FreeCreditReport.com, which gives consumers one free credit report from each of the three major credit scoring agencies each year.

3. Diversify your credit
People don't realize that 10 percent of their credit score is determined by what types of credit you use.
That's determined not only by how you manage revolving debt like Visa, MasterCard, and store credit cards, but also how you handle fixed payments like your car payments or your mortgage payments over time.

Instead of putting long-term purchases on them try taking out short-term one to two-year loans in order to build a diversified credit portfolio. In addition to receiving lower interest rates and more flexible payment terms, consumers who use loans over cards also build positive credit and gain better credit terms in the future.

4. Nip it in the bud!
If you see trouble on the horizon, nip it in the bud! Making a late payment could affect you interest rate, not just on the card you're paying late on, but on all your credit cards. If you know you're going to have trouble making payments, get in touch with your lender and have a discussion about it. We are hearing more and more from our counselors that lenders are willing to look at whether you can put together a different payment plan. Since even one late payment could lower your credit score, preventing disaster before it happens can protect your credit for years to come.