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You can get started fixing your FICO credit score by reaching into your wallet or purse and pulling out the plastic.

Yes, it’s time to get serious about debt….

Your goal is to reduce your outstanding balances on all your credit cards. It’s been reported that nearly one-third of one’s FICO credit score — 30% — is based on the ratio of your credit limits and how much you owe on each credit card account.

Following through with maintaining this ratio on your own cards will go a long way to improving your own credit score.

Make it an iron-clad rule with yourself that you don’t use more than 30-50 percent of your total available credit. This means knowing what your credit limit is, knowing how high the balance is, and making a deal with yourself that this balance will start coming down immediately!

So right now, do this: Turn those plastic cards in your hand over and call the toll-free numbers on the back of them. On a single piece of paper, write down the balance due, available credit left, next minimum payment amount that is due, and the due date.

List all the cards you have, whether you use them or not.

Now, write down in the left column, next to each, what your payments will be if you double the minimum payment this month. Total them up, and make plans to pay this new amount starting with this month’s payments.

This could mean sacrificing spending money on something else. This could mean selling something so you can free up some monthly income to cover these newly self-imposed credit card payment increases. Whatever you need to do, do it. It will be worth it.

Having a credit card that’s maxed out with a $1,000 credit limit tends to hammer your FICO credit score harder than if you have a $15,000 credit line on your credit card and you carry $5,000 in outstanding debt.

You can sometimes call the card issuer and request that they increase your credit limit to get you to this ratio, but it’s easier to pay down the debt and eliminate the amounts you owe. Besides, having more debt could even be too tempting at times, and you definitely don’t want to pile on any more to your credit card balances!

But by following the strategy listed here, you’ll be taking action yourself to fix the problem, and within 6-12 months, with determination and discipline and good spending habits, you’ll be amazed at how fast these credit card debts will disappear.

Yes, I know other credit guru’s recommend paying down the credit card with the lowest balance, or the credit card that carries the highest interest rates first. That’s a great strategy, but you need to first get your card balances in ratio to help improve your FICO score… then you can start down the path of debt reduction.

It’s a good idea to always keep your oldest credit card, even if it isn’t getting used any longer, as the longer you’ve had credit, the better.

But don’t keep the card if there is a stiff annual fee, it may not be worth it. Keep the next oldest card you have that carries no annual fee.

Steve Johnson is publisher of http://www.FindHow2.com, which offers free advice on cleaning up your credit report to help improve your FICO credit score, as well as other
free “how-to” articles on debt management, budgeting, saving money and loan consolidation.

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1. Those who don’t know history are doomed to repeat it.

Our nation is in chaos and the root of it all stems from good graces of man. Credit is deeply rooted into our history, it stems from a person’s or merchant’s product or service is priced too high for the average consumer. When payment from the patron for the item(s) was not convenient at the current time arrangement could be negotiated. This was the birth of the consumer credit program.

Let’s look at a typical California House priced at $395,000. The builder, in order to make a profit, needs to sell many of these homes at this price. How many of us have $395,000 to plop down in one lump sum?

If the builder only sold homes to people who could pay the lump sum, they would not sell many homes and the price would skyrocket to $3,395,000 due to the need for the builder to earn an equitable profit. On the other hand the builder would not make any profit if the homes were sold at $4000 or even $40,000.

2. What’s it going to cost you?

The homes must be sold at a price that is consistent with perceived value and quality, but still needs to make it available to the average consumer. This is the reason the mortgage business is so huge.

Let’s look at another example. This trend is deeply rooted in our history. Have you ever gone to a store and realized you didn’t have the money to purchase an item? Remember asking the store clerk to put it onto your account?

Actually you can still find this type of system where the merchant would allow the consumer a period of up to 30 days to repay the debt; when payment for the goods or services is not convenient.

3. How did this all begin

This began back in the days of the general store where a patron would come by and pick up a few items, charge them to a personal account and the patron would agree to pay the entire account by the end of the month.

4. Does this all still exist?

You can still find this type of environment but it’s gone for the most part replaced by the modern day credit card and department store card. This is a system designed with the theory that you never have to pay off the balance in full. This is called a revolving credit or charge account; pay off some, then spend it to the limit.

5. What happened to the people

This is where people get in to trouble everyday, late payments piling up, and debt occurring from interest added stress. I don’t know of anyone who wants or needs this. As an evolution of this process, it was natural that some type of credit reporting system would be created. Then suddenly the dawn of the credit bureau began.

Creditors or merchants were concerned about doing business with bad debtors; they needed a way to report problem consumers and a way to get the information about them before they established an account for them.

6. With the dawn of the credit bureau trouble had only just begun.

Now that the bureau had been born they began tracking information on individuals and businesses, selling that information to subscribers (creditors) and receiving information as well.

Late payment and other types of errors started occurring on peoples personal credit reports. After a while the errors were so bad that certain individuals were forced to go bankrupt and lose their families to divorce or worse.

People were always in a hurry and rushing to keep up with the Jones’or should I say

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Does this sound like you? Do you need help in mastering the ownership of your credit?

We can help; we have the proper solution for you. If you need a free credit report you can get one here at www.raise-my-fico-score.com/freecreditreport.html. Finding out where you stand is the 1st part of understanding your credit history. Knowing your credit history is easy especially since you know your financial situation. If you want to find out more on how to fix your credit, boost your scores and stay on the safe side of the credit barrier.

Dedicated to raising your credit scores.

Here are some of Ryan’s major achieviments.

Past President ACFA San Francisco, CA USA.
Million Dollar Club Memeber Mark Victor Hanson & Robert G. Allen Inspired
Licensed CA Real Estate Agent
Internet Entreprenuer
Certified Cash Flow Consultant
Credit Repair Specialist

Dedicated to your dreams, and fueled by desire Ryan has hit the nail on the head once again. With his break through special mini report
www.raise-my-fico-score.com

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The “American Dream” is becoming a reality for more families than ever before. According to the U.S. Department of Housing and Urban Development (www.hud.gov) over 67.7 percent of Americans are now homeowners. This is the highest homeownership ever.

The chances of becoming a homeowner are greatly improved when you know and understand your credit score. Lenders use many factors in determining whether or not to approve a loan and your credit score is one of them. Lenders also look at your income in relation to the amount of your debt, your employment history, and how much money are do you have in reserves in case of emergency. Although your credit score is just one factor in determining if your loan will be approved, it is an important one and it is one that you can improve.

Under the Fair and Accurate Credit Transactions Act you are entitled to a free copy of your credit report annually from each of the three national consumer credit companies. A central location has been set up at www.annualcreditreport.com. Here, you can also obtain your credit score (one from each of the companies) for a small fee.

Your credit score is a “snapshot” of your credit history, which changes often. It can also be called your FICO score because the three national consumer credit companies use software to determine the score developed by Fair Isaac and Company. FICO scores range from 300 to 850 and the higher the score the better your chances of obtaining credit. According to myFICO (a division of Fair Isaac and Company) www.myfico.com, the national average is 723. This does not mean that if your credit score is lower than the national average that you will not become a homeowner. There are many loan programs available that allow lower credit scores. You may pay a higher interest rate on your mortgage, but you will achieve the American dream of owning a home.

According to myFICO, there are five factors used in calculating your credit score. Your payment history represents 35 percent of the number. This is followed by the amount you owe at 30 percent. The length of your credit history represents 15 percent of your FICO score and any new credit and the types of credit you use represent 10 percent each. Knowing these factors can help you improve your score.

Your payment history makes up the largest part of your FICO score. If you want to improve your score it can be as simple as pay your bills on time. If you have missed payments, get caught up. Over time, this will improve your score. The longer you pay your bills on time, the better your score.

A factor in determining your credit score is the amount of debt you actually owe versus the amount of credit that is available to you. Hence, paying down your obligations will improve your credit score. You do not want to close your unused credit cards since they will show you have more credit available to you than you are actually using. Paying off debt is good while closing the paid off debt can actually hurt your score.

In order to determine a credit history, you must have at least one piece of credit reporting for at least six months. So if you find that you have no credit score, you need to find a way to establish credit for a period of six months. Although you need to watch for various credit scams, there are secured credit cards available that will meet this need.

Since your credit score is a “snapshot,” opening t0o many new accounts in a short period of time will hurt your credit score. This is caused by your average account age being reduced by all the newly established credit.

When you apply for credit (i.e. mortgage, auto loan or credit card) the company will look at your credit report. This is called a credit inquiry. Although too many credit inquiries can lower your credit score, opening new credit and paying it on time will improve your overall score. You reviewing your own credit, as long as you are obtaining your credit report from an organization authorized to provide credit reports to consumers, will not affect your credit score.

It is better to have credit cards and pay them on time, than to not have any credit at all. A lender will look at a mortgage loan or large installment debt more closely than a small credit card. However, all types of credit, including paid off and closed accounts, are used in calculating your credit score.

If your credit score is low, often the best way to raise your chances of becoming a homeowner is by paying your debts on time, and for a period of time. The longer you demonstrate your ability and willingness to pay your obligations, the greater the chances you will be able to achieve the “American Dream” of homeownership.

Jim Campanella is the Operations Manager of Fresh Start Financial Services, a mortgage broker in Rolling Meadows, IL.

Since 1989, Jim has been active in State and National professional associations/trade organizations in the mortgage industry. in 2004, Jim Campanella was recognised by the Illinois Association of Mortgage Brokers as the Mortgage Broker Operations Manager of the Year. He has spoken on a range of mortgage related topics from coast to coast.

Fresh Start Financial Services is a licensed mortgage broker in the States of IA, IL and WI and originates loans also in CO, IN and MO. In 2003, the Illinois Association of Mortgage Brokers recognised the mortgage broker as the Subprime Mortgage Broker of the Year.

Jim and his family make their home in Rockton, IL.

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