thanks to this board (long)

I started following this board last spring and learned alot about credit improvement from you wonderful people. Credit building is more complex than holding down a job, paying on time and staying within limits. During the past year, my credit lines have tripled even after accounting for the fact that I closed out two accounts totaling $5300. The interest rates on my cards have dropped from the 16-23.99% range to 9.9-19.8% also in the past year. I attribute much of this improvement to adopting many of the good ideas posted by the contributors to this board.

I thought it would be interesting to reconstruct my progress over the years from the days when my credit report was really bad until now when it is pretty good. I pulled old credit reports (some years missing) from the file and came up with this:

Date Total limits

11/94 $2,200 (100% secured)
4/97 $9,325
5/98 $9,700
7/99 $16,000
3/00 $17,700 (started following this board)
1/01 $51,600

Now if someone can tell me what I'm supposed to do with this amount of credit, I sure would like to know, but it's nice that it's there if I ever need it.

I attribute the improvement especially to these ideas:

1. Pay on time even if you have to walk over crushed glass to get the payment there before the $29 late fee posts. Paying online avoids the late mail problem. Print out a confirmation in case a dispute arises about whether the payment was made.

2. Use your credit. Maxing out a card and paying it down to zero over 6-9 months is a good strategy for increasing lines.

3. Make large payments. Never pay minimums unless that's all you owe.

4. Carry a balance from time to time. Creditors will give larger and more frequent increases to accounts that make them money.

5. Negotiate waivers of annual fees and reductions in interest once you are established. With solid credit, you can bid them down to keep your business.

6. Minimize the use of cash advances. For one thing, they are too expensive and for another, the creditor may think you don't know how to manage money.

7. Keep your total revolving balances as low as possible. Do not exceed 50%. Less than 20% is ideal. This will save you money and help you get more credit from other lenders because they will see that you have financial self-control.

8. Take advantage of balance transfer offers that have good rates. This will save you money.

9. Set up an accounting system like Quicken
to keep track of spending and limits. This will make you much more conscious about how much you owe. Getting into serious debt can happen quickly and painlessly, getting out of it is something else.

10. Always read the small print and make sure to scrutinize the bill and inserts so that you can protect yourself from surprise changes in terms and take action to counter them.

11. Monitor your credit reports and make sure the CRAs correct erroneous information.
Don't mean to be preachy in setting forth these eleven commandments. True, Moses covered the entire spectrum of human endeavor in only ten but, hey, he didn't have to deal with the nuances of the modern world, did he? I'm just summarizing (plagiarizing) some of the ideas that have been posited on this board that I find useful and sensible. Feel free to add your own. This is a work in progress.

 

RE: thanks to this board (long

thank you sam.