I got told to always pay off my cards etc in full every month when I started to investigate credit repair This was one of the best credit repair secrets I was given. This I was told from a number of people. This is simply not true. The more important aspect I discover was my debt to credit ratio and then a simple way to repair 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.
For example:
Your available credit = $10000
Your current debt = $2500
Your debt/credit ratio = 25%
Why is it lenders prefer you don’t pay off your bills in full? For one they make a bigger profit from interest, and by keeping a balance you also show you are a payer.
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?
Get a card that you can only use to buy goods from a certain catalogue or a store online.
They will approve all-comers and you will get a line of credit for say $5000 that can be used exclusively at their store. 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 bureau treats it like a normal card. So, overnight you have increased your credit limit and you are holding a balance. This means other lenders will make you pre-approved offers as they get your information from the bureau. So you can do credit repair yourself.
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