Yes you can.

Let’s look at a couple of ways to repairing a bad credit history without contacting the Credit bureaus.

It’s generally taken for granted that a higher credit score will open all kinds of doors for you.  When that’s the case, you suddenly become eligible for lower interest rates on loans, maybe qualify for a home mortgage, and even pay lower insurance premiums. 

Did you know that there are three companies compiling the reports on which your credit score is based?  But if your credit score is low, can you raise that credit score without contacting the three credit bureaus?  The answer is a resounding YES… And you’ll soon find some “do it yourself credit repair tips” in this article.

The simple answer to improving your credit rating lies in “raising your high credit limit and lowering your debt to credit ratio”. 

When you open an account with a lender or credit card company, they set a credit limit for you.  But if you have a low credit score you’ll be lucky to get a standard (unsecured) credit card.  However, there are other options, some good, some bad.  Let’s take a quick look at three of them.

Sub-prime Credit Cards. 
This type of credit card offers only a small amount of credit, sometimes as little as $300.  Yet the companies may charge you very high fees.  For example, you might get hit with an application fee, an account set-up fee, a monthly “participation” fee, and an annual fee on top of all of that.  So, after you add up all the fees, and you won’t have much credit left. 

My advice?  Stay away from the sub-prime credit card; if you’re not careful they can actually hurt your rating.

Secured Credit Cards. 
This is another type of card that consumers with low credit scores can obtain – the secured credit card.  These typically require a cash deposit.  For example, if you put $500 in your secured account, then you can go out and charge $500 worth of goods and services. 

So why not just spend the cash?   Because using the secured credit card will raise your credit limit. 

However, be sure to do some comparison shopping – some secured credit cards have high fees!!

Sub-prime Merchandise Cards. 
An easier way to increase your line of credit without getting into a financial bind is to get a sub-prime merchandise card.  These allow you to buy merchandise from a specific store (usually the company that sold you the card – often an online retailer).  You are required to put down a deposit on whatever you purchase, and then the balance is financed on the merchandise card. 

The advantage of the merchandise card is that this new credit line is reported to the major credit bureaus.  For example, if you get a $5,000 sub-prime merchandise card, and you finance a $500 purchase, your high credit limit will be increased by $5,000, and the small outstanding balance will help lower your debt-to-credit ratio. 

A sub-prime merchandise card is not the same as a VISA or MasterCard!! 
You can’t go to any gas station or food store and expect them to accept it.  And before you select a card, make sure that the provider does report to the credit bureaus, otherwise the card will not meet your objective.

There are many more ways to increase your credit score without contacting the credit bureaus but first of all, you need to understand what is meant by a “credit score.”  So let’s spend a little time discussing the issue.
 
The fact is, most consumers still don’t understand that their credit score measures their credit risk. Your credit score, sometimes called a FICO score developed by the Fair Isaac Corporation, is based on information about you from companies that gave you credit in the past.  The lower your credit score, the higher the risk you pose to banks and other lenders. 

Let’s spell out five reasons why raising your credit score could improve your life style.

Reason #1 
A higher credit score will get you a more affordable mortgage.  Particularly in these days of tightening credit, banks pay close attention to your FICO score when you apply for a home loan.  Improve your credit score and get a lower interest rate.  Just a 2% reduction in the interest rate on a 30 year fixed mortgage on a $200,000 home will save you over $96,000!  Now, isn’t that worth doing a little work on improving your credit score

Reason #2 
Pay less for your car.  The interest rate on your auto loan is closely linked to your credit score.  Clean up your credit report, and you’ll be able to afford a nicer car for the same monthly payments! 

Reason #3 
Lower your auto insurance premiums.  It’s true!  Many auto insurance companies check your credit score before they set the premium on your insurance.  They think that a high score means you might be a safer driver.  It makes a lot of sense to play along with their rating game, if it means you’ll save money on car insurance.

Reason #4 
Get more affordable life and health insurance.   Many consumers don’t know that the premiums they pay for their life and health insurance are affected by their credit score.  Insurance companies spend a lot of time and money trying to figure out which customers will make their business more profitable.  And the insurers have determined that customers with low FICO scores have a harder time paying their monthly premiums.  So, they reward customers with a better credit score by offering them a lower premium on life and health insurance.

Reason #5 
Get a better paying job.  You may be shocked to learn that more and more employers are doing credit checks on job applicants before hiring them.  While the employers may get your credit report to verify information you put on your job application, there’s nothing to stop them from seeing how you handle your financial affairs, too  It would be a shame to lose out on a good-paying job just because you were late on a couple of credit card payments. 

Many more aspects of your life are being affected by your credit score than you might have imagined.  Raise your score, and you may well raise your standard of living through lower interest rates, a better job, and a more affordable lifestyle.  But how can you repair your poor credit rating  There are many options, ranging from credit restoration companies (some of whom are reputable and affordable) to do-it-yourself plans.  You owe it to yourself to look at all the options, and then to take action.

Carefully consider your options, and then move forward.  There is never a better time than right now to start taking steps to improve your credit rating

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