You have the right to know exactly what is being reported on your credit report and you can get a free report from each of the three main credit-reporting agencies one time each year. If there is erroneous credit you can issue disputes and you can also do other things that will raise your score. For example, since a great part of your credit score is attributed to your debt to credit ratio, you can either pay down your debt or get your credit limit raised and either should raise your score.
However, there are a few other little-known tips that may help you to get approved for credit.
Secret #1: Do not pay off your credit cards every month. Many people believe that they are in great shape because they pay off their credit cards every month, however, that is no way to build credit. The fact is that in order to build credit you must carry a balance and make regular payments. The trick is to carry the proper amount of a balance. A large portion of your credit score is debt to credit ratio, which is the amount of debt you have compared to the amount of credit you have available. Try to keep it somewhere around 20% and make your regular payments and you should be good.
Secret #2: Try to remove the derogatory listings on your credit either through issuing a dispute or through negotiations with your creditors. But you will also need to include some good credit accounts on your report. One way to do this quickly is by applying for a Sub-prime merchandise account. This is a line of credit that allows you to purchase merchandise from a specific vendor, usually the company that sold you the card. The merchandise is typically available through a catalog or online website. You can also get a secured credit card, where you deposit money into an account and use it for security for your line of credit.
Secret #3: Always use your home address when you are applying for credit instead of a P.O. box, a UPS store or other convenient mailing address. If you use a different address you are more likely to be denied the credit because the credit bureaus keep track of your address and they will list you as reporting an untrue address.
Secret #4: If you are self-employed and you own your own company, consider incorporating and taking a salary instead of being a sole-proprietor. Employment history counts and a steady working history can easily be proven with the records from a corporation.
Along with these tips it is also important to stay on top of your credit report and know what is being reported. Take advantage of your free copy every year. Credit monitoring services will alert you to any changes in your credit report but unless you are concerned about identity theft or you are dealing with a great deal of credit, they may not be helpful for you and your free copy may be sufficient.
