Fight Back!

So how should you fight back? Well, some will tell you that your only defense is to clean up your act and get current with all of your payments. And no doubt about it folks, this is sure as a good start. But this is not going to do that much for you over the short term. So if you are looking to re-mortgage this year with a better rate, you are going to need to use a few better tactics than this.

The first thing you are going to want to do is get hold of your credit report from each of the above mentioned bureau’s and make sure that it is actually correct. You would be surprised at the number of mistakes you might find. Now that all this is taken care of, we need to sit down and look at your available lines of credit. You should be using no more than 30% of your available credit on any one credit card. This means that it is not always a great idea to put all of your debt onto just one card. It is actually best to spread your debt over several cards if you are looking for the best possible FICO score.

Consolidation can be a great idea to save you money on multiple high interest rate cards, but it can also bring down your score significantly, so weigh your options carefully before making any sudden moves. What do you need most at the current moment, a higher FICO score or lower overall credit card payment? Just remember, if you have five credit cards run up 30% of your available line you will be scored higher than if you only have one card at 85% of your line. A little food for thought.

Finally, if you have consolidated your credit card debt, and you are now realizing that you have made a mistake and damaged your FICO score. DO NOT go out and open a bunch of new lines of credit to counter your previous actions. This practice will only make you look like a three year old playing with matches and sandpaper inside a nitroglycerin tank. The main key with FICO is to carefully weigh all of your options before bending over to give ANYONE a bone!

*photo curtesy of fgrumach at stock.xchng