Personal Finance News Tuesday 5/1

Phil's Personal Finance Tip of the Day:

Improving Your Credit Score Without Gimmicks
By Ray Martin | CBS MoneyWatch – Mon, Apr 30, 2012 3:19 PM EDT

Chat boards and web sites are filled with tricks and gimmicks to improve your credit score.

One gimmick that gets a lot of attention is the practice called credit piggybacking. This is where one person, sometimes for a fee, agrees to add you as an approved user on their credit account. This is typically an account with a good history and lots of available credit. The result is that their credit account and history is added to your credit report. This increases your credit score and in some cases the increase can be dramatic. It amounts to buying another person's good reputation and posing that it is your own. While I'm sympathetic to the folks who want to improve their credit score, it's simply the wrong way to go about it.

[Related: Dangerous Black Holes in Your Family Budget]

But what if you have a few late payments or other negative information on your credit report? First, get a free copy of your credit report. Don't assume your credit score is doomed. There are steps you can take that can boost your credit score. Some of these steps can increase your score by 20 points or more in a single month -- and best of all is that you don't need to hire some credit repair shop to do it.

Pay Recent Past-Dues: The first thing to do is to pay the past due payments on the accounts that recently fell a month or two behind. That's because the more recent the late payment, the more it will lower your score.

Request Credit Report Adjustment: After bringing past due accounts current, contact the creditors who report late payments on your credit report and ask them to make a good faith adjustment to remove the late payment information from your credit report files. Not all creditors will do this, but if you ask politely and remind them that you will continue to be a good customer, you may find a few that will work with you.

Pay Collections that Vanish: Pay off accounts where the collection agencies agree to remove all references to the accounts from the credit bureau files. Make this a requirement of your offer to pay off the account.

To read the entire article By Ray Martin | CBS MoneyWatch:
http://finance.yahoo.com/news/improving-your-credit-score-without-gimmicks.html

Quote of the Day from Dave Ramsey.com:
I'm not going to limit myself because people won't accept the fact that I can do something else. — Dolly Parton

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