When I started to look into credit repair I was told, among other fast credit repair secrets, that I should pay off all my credit card bills in full every month. Many people, agencies gave me that advice. Boy is this wrong! This is simply not true. I found that my debt to credit ratio was really important and then found a simple process to improve your credit score.
First you must understand your debt to credit ratio as it is the most ignored factor in credit scoring. Simply it is your amount of current debt to your total available credit.
Your available credit = $10000
Your current debt = $2500
Your debt/credit ratio = 25%
Why do lenders like to see you DON’T pay off all your bills? Because they make most money from interest not charges, and if you maintain a balance it shows your ability to pay long-term.
So let me give you just one fast credit repair secret making use of the debt to credit ratio and maintaining a balance.
The single most cost-effective tool is the use of a sub-prime store merchandise card which reports to one of the major credit bureaus. These cards are often misunderstood because of the way they are marketed either by email or on the Web. They are often seen by the public as untrustworthy because they make claims like “$5000 credit No Checks!”, but some of them are genuine.
How does it work?
You apply for a card with a line of credit that is only good for purchasing goods from a particular store (usually an online mall or catalogue).
The company approves absolutely anyone and gives you a card with a $5000 limit for use at their store only. When you buy something you are required to put down a deposit and the rest is financed. So, for example you buy $1000 of stuff, put $300 down and make payments on the $700 balance.
The fast credit repair secret is that the credit bureau sees it like any other credit card. So, overnight you have increased your credit limit and you are holding a balance. You will then receive pre-approved offers from other lenders who have got your details from the credit bureau. Beautiful. A great way to improve your credit score.