November 24,2008
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Boost Your Credit Rating(201), Pt.4 –
– You can do it; it's not rocket science.6) Ratio of charged against credit limit: This is best kept below 50 percent. This alone, could be worth 40 to 60 points added to your credit card score. With the recent move of lenders to lower peoples' credit card limits, there is an inadvertent hazard. If a person owes $3,000 dollars on a $10,000 limit credit card and their limit is reduced to only $4,000, that person now faces a demotion in his credit rating. He is over the 50 percent flag of risk. Further repercussions could follow.
7) Charge-offs, collective actions or bankruptcies: Obviously, these are bad. Sometimes, disputes can cause collection agencies to get involved. These people almost never see your side no matter how right you are, since they are being paid by your opponent. Their most effective weapon (beyond scare tactics) is the 120-day flag. The credit card rating bureaus generally use this demarcation as a place to get involved. So it's best to reach some sort of resolve before this takes place. Collections people usually come out of the woodwork in the seventh year because they know that after eight years, the debt will probably be uncollectible. They make you believe that they hold a trump card, when they usually don't. If push comes to shove, always remember that you can append all of their accusations with your own rebuttal. Most rating bureaus care about this, even thou they don't go to much trouble to clear things up for you. You can, however, work with them and eventually get fair consideration from a lender. The rating bureau will probably allow you to present your side of the contest so you are well represented in the report that these rating bureaus issue to inquiring lending institutions.
Keep in mind, by monitoring these conditions properly, it is easily do-able to attain and maintain an excellent credit card rating in the FICO 800 category within a year or two. The rewards are great, like enjoying zero percent interest and ‘Bonus Rewards' for shopping and, even, having cash placed actually in your account with no strings attached and without lifting a finger. This column writer has done it successfully for eight years now. It's neither a scam nor rocket science.
One last thing: If your credit card issuer changes your terms against your favor you should have the right to ‘opt-out'. By doing this, you may be prohibited from making further purchases on the card but, at least you can keep your old terms until the card expires.