Ultimate Guide To Credit Repair

A working knowledge of our credit system is something that should be included in curriculums across the country and yet, few if any schools are making the effort to educate their students on how to maintain their financial health. Knowing how to check your own credit reports and how to accurately read them should be a priority for every consumer in the United States and sadly, less than 50% of residents have ever even looked at their credit reports. Of those people, it is estimated that 90% of them don’t even understand how to interpret their credit reports.

I think it is everyone’s dream to have perfect credit, and be able to apply for anything without worrying about being turned down. But do you really know what perfect credit looks like? In this article, I will outline the perfect credit profile, and share with you how you can get on the road to achieving perfect credit for yourself.

much of what you read here will not make sense to you since you have probably been told things in the past that are simply not true. There is much confusion out there when it comes to credit, so open your mind, and get ready to learn.

One easy way to help your credit scores is to have a variety of accounts. Revolving accounts (credit cards), installment loans and mortgages look great when appearing together on a credit report.

Mortgage Accounts (Ideal 1-2 accounts): Having at least one mortgage account will be an advantage to your credit. If you have not yet purchased a home, this gives you something to work toward.

Installment Loans (Ideal 1-3 accounts): Installment loans such as auto loans are good, but you don’t want to have more than a couple of them. Owning too many auto loans or other personal installment loans can cause you to look over-leveraged. There are also other types of installment loans that are not as valuable for your credit such as easy credit loans for furniture, household goods, etc. These may be a good way for someone with little to no credit to establish credit, but they are not the best way to obtain the best scores.

Revolving Accounts – Credit Cards / Store Cards (Ideal 3-5 accounts): This category of account has a great deal of variance among the type of credit cards and store credit obtained. Major credit cards are more valuable to your credit than department store cards. You should shoot to have no more than about 3-5 of these type of accounts. The lower-end credit accounts such as mail-order catalogs are not looked at favorably by lenders. As with any low-end credit accounts, the more high-end accounts you have the less they hurt you.

Another factor to consider with revolving account is the length of time the account has been opened. The longer an account has been opened and responsibly cared for, the better it will reflect on your credit reports. Keeping your balances below 50% of your total credit limit can help your scores immensely. Accounts in good standing that get closed will only remain on your credit reports for two years and cancelling an aged account will most likely cause a drop in your scores.