Lenders are making it more difficult to secure a loan during the subprime market fallout, and many Americans are finding themselves in a position where they do not have adequate credit scores to secure much needed loans to meet their needs.
Jamison Law Group announced Wednesday, that Edward Jamison, a Los Angeles-based credit attorney (who you may have seen as a credit expert on the Award-winning show, Starting Over) offers free advice to consumers who desire to raise the credit score in order to secure loans or take advantage of the lower interest rate afforded to those with the best credit scores.
“The steps required to raise credit scores may appear counterintuitive,” explains Jamison “In fact, individuals should be warned that without knowledge of how credit scores are derived, individuals can be damaging their credit scores rather than raising them when taking such actions as closing credit cards.” (Jamison Law Group)
Jamison recommends seven steps that the consumer can take right now to improve their credit score. In fact, he claims that individuals can positively affect their credit scores in three weeks.
- Check your credit limits on all credit cards and evenly distribute your current balances over all cards, or if feasible, pay them off in full to capitalize on the highest score increase.
- Make sure your maximum limit is reported. If the limit is not reported, credit scoring programs assume that your account is at the limit. Credit scoring software scores are highest when your balance is closest to zero. Scores are derived from the tier in which your balance falls. Balances over 70 percent of your maximum limit draw a low credit score. The next tier is between 50 percent and 70 percent. The next tier is the 30 percent tier which will draw a favorable credit score.
- Keep your credit cards open. Unless you have over 6 credit cards, or the account has been opened less than two years, closing out credit accounts can actually hurt your credit score. Credit scoring programs assume that people who have had an account for a longer time are less of risk in defaulting on payments.
- Contact creditors that have reported late payments and request a good faith adjustment by removing the reports of late payments on your account. Be polite and ask specifically for the adjustment. It may require more than one call to accomplish this.
- Pay off collection accounts, but only if the collection agency is willing to delete the report in return for your full payment. Contact the collection agency and request a letter stating the agency’s agreement to delete the account upon receiving payment from you. Paying off this account without the agreement to delete the account can actually hurt your credit rating due to the fact that the last date of activity will be updated to the day you make the payment.
- Pay off delinquent accounts that are not in charge-off status.
- Get rid of any charge-offs or leans that are less than 24 months old. These effect your rating far more than those that are more than 24 months old.
I you have both collection accounts and charge-offs and have limited funds, Jamison recommends that you pay the past due balances first and then make arrangements to pay off collection accounts that agree to remove all references to any credit bureaus.
Edward Jamison is an attorney specializing in consumer credit and identity theft. He is the credit expert of choice by the Mortgage Market Guide, CMPS (Certified Mortgage Planning Specialist) Institute, and California Association of Mortgage Bankers, and is the founder and president of Jamison Law Group. Jamison has assisted tens of thousands of consumers repair their credit in the past seven years. Visit www.CreditCRM.com for further information about credit repair.
Source: Jamison Law Group Press Release