Save Your Credit Score With These Five Steps

man hands a credit card over - credit scoreIf you're an even semi-regular WalletPop reader, you know the importance of a good credit score. Not only is it your golden ticket to getting better rates for things like mortgages and credit cards, it also may help you get lower rates for auto insurance, rent an apartment and even get a job.

But with lenders continuing to tighten their standards even as the credit crunch eases, Americans have to keep close watch on their scores. Even a small slip could mean the difference between qualifying for a lender's prime rate or not.

If you're one of the many consumers just treading water with your credit score or trying to keep a small mistake from mushrooming into a financial crisis, read on. WalletPop spoke with credit score experts and asked them what steps you can take to save your credit score now.1. Check Your Credit Report

Credit reports can contain numerous errors, from records of nonpayment by someone with a similar name as yours to old or out-of-date loan information. Readers have told WalletPop of mix-ups involving similar names, incorrect reporting of credit limits and "black marks" that should have been stricken from the record years ago. The only way these readers -- and you -- can find out about mistakes that can drag down your score is to check your report regularly and go over it with a fine-toothed comb. is the easiest way to get a peek at your report, and if you space out your requests, you'll get three a year.

2. Set Up Automatic Payments

The biggest score-killer is late payments, says Mary Ann Campbell, a personal finance expert for "Set up an automatic payment for the minimums so they're never late again, because those late payments can become a vicious cycle and have such a big impact on your score," she cautions. Of course, it'll be up to you to make sure you have enough money in the account to cover those bills, since overdrawing your account could exacerbate your problem if you get dinged with overdraft fees.

3. Come Up With a Crisis Plan

Many people fell behind on their credit cards after a job loss and are now saddled with bad credit through no fault of their own. To prevent this from happening to you, take a page from countries' and major corporations' playbooks and create a "disaster plan" for your finances, says Laura Creamer, a financial education specialists at consumer credit counseling organization CredAbility. First, build up an emergency cushion of savings by funneling a small amount from each paycheck into a separate, no-fee savings account; if you get a raise or a bonus, split the surplus and sock away half of it. Second, if you do experience a job loss or take a big pay cut and find yourself unable to make the minimum payments on your credit cards, get in touch with your creditors before you fall behind and explain your situation.

"The first thing for those who are experiencing something like unemployment is making sure they're keeping in contact with their creditors," Creamer says. While that won't prevent your score from dropping if you miss payments, some issuers have hardship programs that could keep a bad situation from getting worse by offering leniency on fees and interest rates.

4. If You Do Miss a Payment, Don't Let It Snowball

Thanks to the CARD Act, credit card issuers can't slap you with punitive rate increases if you have a single late payment, but late fees could make it harder to stay on top of your bills. Plus it's a slippery slope from slightly late to late-enough-to-impact-your-score.

"A lot of people get stressed out that their score will drop if they're a couple of days late," says Odysseas Papadimitriou, CEO and founder of Evolution Finance. He's quick to add, though, that getting complacent about on-time payments is the quickest way to watch the fees pile up and your credit score go down. Especially if you don't have the option of not using a credit card, late payments will lead to interest rates that could be nearly double what cardholders with good credit are paying.

5. If You Do Slip, Rebuild Quickly

If your credit is so bad that conventional card issuers have closed off your accounts -- especially if those closures are due to nonpayment or charge-offs -- it's imperative to begin reestablishing your creditworthiness as quickly as possible. "If you have bad credit, the best way to improve that is with a secured credit card," Papadimitriou says. While there are fees associated with these cards, you're basically using your own money to restore your credit.

By contrast, popular prepaid debit cards don't report to credit bureaus, so they can't help you achieve a higher score. "Over time, all secured cards allow you to increase your deposit and your credit line," Papadimitriou says. "That's important because creditors like to see that you have available credit that you don't use. Even if it's just $50, take it and increase your deposit."

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Do yourself a "HUGE FAVOR" and carefully read this:

The 21st Century Act: Final Amendments to Regulation CC Section:
"Prohibits" reimbursement of Credit, Loan, and Finance Balances to a "Bank Entity" leaving only "Nonbank Consumers" able to receive reimbursement, as specified on Pages 85 and 86.

The 21st Century Act states on pg. 85 and 86 that "Only Nonbank Consumers can suffer losses and File for
Re-credit or Re-claim on any Accounts under the Federal Reserve System" also “Any Second or Third Party Presenters utilizing a Banks Documentation, Contracts and/or Agreements to seek Claims shall be considered to be that Bank under the Rules and Regulations”, the Expanded Definitions also includes Credit Cards and Home Equity Lines of Credit.
Also on Pages 100 and 101 "In any Financial Claims the Indemifying Bank (Parent Bank) must be Identified".

(Left-Click to Search Link)
21st Century Act: Final Amendments to Regulation CC

This Federal Law signed January 1, 2006 makes it "Fraudulent" and therefore "Illegal" for the 3 Major Personal Credit Reporting Agencies: Equifax, Experian, and TrasUnion to allow the Banks and the Banks "Third Party Presenters" to place any claim of "Negative" or "Potentially Negative" Accounts on your Personal Credit Based upon the fact that they have no "Legal Grounds or Claim" to the Money.

This is an "Unfair Practice" that diminishes our Financial ability to support ourselves and adversely affects our ability to gain work in many areas which breaks "Antitrust Laws".

These Rules also back claims of: "Aiding and Abetting" Racketeering and Extortion (of Finance Accounts and Personal Credit Reports), Pandering (of Credit and Loan Accounts, and Conspiracy to wit), Theft, Fraud, Federal Mail Fraud, and Telephone Harassment. Also "Threatening of the U.S. Financial Infrastructure", which is a "Capital Crime".

In order to engage the Federal Trade Commission to act against this injustice we must File many Claims, as these Reports must be Filed by a large number of people in order for the Federal Trade Commission to pursue
"Legal Action".

(Left -Click to engage Email Address)

This is way easier than "Occupying Wall Street"!

March 11 2012 at 4:50 PM Report abuse rate up rate down Reply

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January 12 2012 at 5:24 AM Report abuse rate up rate down Reply