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Adding good trade-lines to your credit reportIt's important to note that millions of Americans have A-1 credit accounts that never show up on a credit report because not all creditors will share your credit history with a credit bureau. One form of such credit is a utility. Utility companies extend credit until you prove that you aren't credit worthy. Most utility companies routinely extend credit for a thirty day cycle, but only report to the bureaus on that account if there is an extreme instance of non-payment. Now there are ways to capture a good credit history from a non-reporting lender. The Federal Trade Commission (FTC) has advised credit bureaus that when a report has created a negative action against a debtor, that person may add a creditor's name and positive credit information that will show a favorable credit history. As a result, most credit bureaus will contact any creditor you name, and then add that information to your file. There may be a small fee, but if you have bad credit any positive credit information you can add would generally be well worth the small costs. To build your credit in this manner, start by listing creditors that have not reported your personal credit history to a credit bureau. List only those with which you have a good relationship and flawless payment record. Let these creditors know that the credit bureau will be contacting them, and ask them to release your account information to the caller. Once a creditor has been contacted, write the credit bureau and ask them to contact the list of creditors you will provide. Also ask them to add this information to your report as soon as the information has been verified. Give them the name of the lender, phone and address, your account number, length of time the account has been open, monthly bill and outstanding balance. Once you have cleared as many negative items as possible from your credit file and added more positive reports, your credit rating will improve dramatically. The best part of this strategy is—the negative items will eventually go away, while the positive reports that you've added will stay! AskingThe best way to build credit is simply by asking. When you have a credit account—this works best for credit cards, but also does for other accounts—ask for an increase in your credit line every 6 months. It's helpful to the lender if you have a specific reason that you are asking for an increase in your credit line. Perhaps you are going on vacation and only want to bring one card with you. Perhaps you are about to buy some computer equipment for your business. Perhaps your new company is going to have you travel a lot and cover the basic costs of the travel for one month until you are reimbursed. By increasing your available credit without increasing your balances, you’re effectively reducing your debt ratio which makes up about 30% of your credit score. |
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