5 Steps to Building Better Credit

A recent study by PIRG (Public Interest Research Group) found 70% of credit reports contained serious errors or mistakes.

It's a well known fact that having low credit scores costs consumers money. Credit ratings are the No. 1 determinant in a bank's decision to extend or decline credit. If your scores are low but still qualify you for credit, you will undoubtedly pay higher interest rates. Complete recovery may be a long and tedious process, but here are some steps you can take to ease the restoration of an acceptable credit rating.

1. Decrease Your Balance. High balance to limit ratio lowers your credit scores. Pay down your credit cards below 50% of their credit limits. Any revolving debt which balances are 50% or more of their limit reports as being maxed out. Do this and your scores will instantly improve.

2. Maintain Credit History. Do not close old accounts. Credit repositories take into consideration the length of time you have established your credit.

3. Get Secured. Can't qualify for a credit card? A great way to rebuild your credit is to open a secured credit card. This offers the same benefits of a regular card and will also give you the option to convert to unsecured credit in the future. Another great way of re-establishing your credit history is to obtain a savings account secured bank loan. Most banks won't run your credit when you apply for these loans and they rank high in credit scoring. If you have a few hundred in cash on hand, this is an excellent way to establish perfect payment history.

4. Piggyback. If you know someone with a good credit history and score that would be willing to add you to their account, become authorized buyer. This will immediately raise your score.

5. Opt Out. Under the Fair Credit Reporting Act (FCRA), the Consumer Credit Reporting Companies are permitted to include your name on lists used by creditors or insurers to make firm offers that are not initiated by you. The FCRA also provides you the right to "Opt-Out:, which prevents Consumer credit Reporting Companies from providing your credit file information for Firm Offer. Opting out at www.optoutprescreen.com has shown to increase scores as much as 15 points.

Blane Russell, President of Eagle River Mortgage. Established in 1997, ERM is now the largest independent brokerage in Idaho. Blane specializes in residential and commercial mortgage solutions. He is also a preferred lender with multiple resort communities across the northwest. His early experience in debt collections has provided a knowledgeable foundation for his continuous efforts in helping consumers repair their credit, gaining back the credit-worthiness they deserve.

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