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Credit Card Depot And Debt Consolidation

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Phyllis Said:

How do I fix my Bad Credit?

We Answered:

Maryn's answer is excellent - you must repay ALL your bills so you do not appear as if you are SELECTIVE about which bills you pay.

A consolidation loan could be a good way to go but only if you pay all your debts with it, and don't get deeper into debt in the meantime.

Also, to raise your score you need a detailed understanding of exactly how credit scoring works.

There are five areas that go to make up your score, and they are weighted differently - some areas are more important than others and have a bigger effect on hurting or improving your FICO score:

1. Payment History = 35%

2. Amounts Owed = 30%

3. Length of Credit History = 15%

4. New Credit = 10%

5. Types of Credit Used = 10%

So, the 10 best things you can do for raising credit scores are:

KEEPING A CLEAN PAYMENT HISTORY

1. Pay on time. At 35%, payment history is the largest area of concern to lenders. The only thing that will damage your score more than late payment is total non-payment.

2. Did I mention pay on time?

AMOUNT OWED - NOT TOO MUCH (BUT NOT TOO LITTLE)

3. Ideally keep your debt to credit ratio to 30% or less. This means only using 30% of your available credit per card.For example, if you have a card with a credit limit of $1,000, keep the balance at $300 or less.

4. This holds true per individual card but also for your debt to credit ratio overall. This means you need to pay down debt - not just move debt around. This is a frequently misunderstood aspect of how to raise credit scores. You will save money by doing the 0% APR balance transfer dance, but you will not improve your FICO score.

LENGTH OF CREDIT HISTORY

5. A longer average account age will boost your score. This means that opening new accounts can lower your score because a new account will bring down the average age.

6. Point 5 above has a rider - if you have poor credit you need to re-establish your credit and rebuild your credit. This means taking a hit in the short term by applying for as much new credit as you can get so that in the long term your score will improve.

NEW CREDIT DOs AND DON'Ts

7. Don't constantly apply for new credit. If you are shopping around for credit, try to squeeze the applications into a short time frame. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. If you are just starting out building your credit, a lot of inquiries will lower your score more than someone with a longer history.

8. Do request a copy of yor credit report regularly. Requesting a copy of your own credit report does NOT damage your credit score. This is an Internet myth. Requesting your own credit report or credit score from an authorized provider does not set off alarm bells the way that multiple requests sometimes does.

TYPES OF CREDIT USED

9. Mix it up. A combination of revolving credit such as credit cards and installment payments like a car loan is ideal.

10. Avoid store cards such as Target, Home Depot and so on. These count as lines of credit as opposed to revolving credit like regular credit cards. Store cards are not given much respect by credit scorers. In the long run, the convenience or in-store discounts will not make up for being refused a VISA card or a prime mortgage rate later on down the track.

ALSO, BE WARNED. You will get replies to your question from people who make money from sales commissions when they refer new clients to so-called credit repair specialists. Do your own credit repair and use every dime of your money to pay back debt - don't get sucked into sales pitches as there are no miracle cures or magic bullets.

If you are really motivated to learn more and get your credit straightened out you can download a free credit repair ebook from the link below. You will not have to register or give your email or credit card details or anything else.

Tyrone Said:

I was looking on my credit report and I noticed a credit card that i am not aware of, please help!!!?

We Answered:

From a debt consolidation website:

THD/CBSD stands for The Home Depot / Citibank South Dakota. Presence of THD/CBSD in your credit report means you have a Home Depot credit card from Citibank.

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