If there is one question I’m asked by consumers more than any other about credit, it’s this “What’s the fastest way to raise my credit score?”. My response is always the same “How much do you want to raise it?”

If you wish to increase your score from 580 to 650 then your strategy will be very different from someone wanting to go from 670 to 725. Why? Because you starting point is different which requires a different approach. Also, while the removal of negative items from a report will almost always lead to an increase in score, it’s a basic concept at best. Therefore, within this article, we’ll discuss somewhat inside techniques known by very few (since this is what our company specializes in publishing).

In relation to just removing negative items, these are techniques which you can use even if you have NO derogatory information on your credit report. We’ll start with the most overlooked strategy first and that’s your…

DEBT to CREDIT RATIO: The most fraudulent belief I’ve been hearing for over 15 years is “I have excellent credit, I pay all my bills off in full every month!” This is a false belief for one to buy into and understanding your debt to credit ratio holds the key to getting your “credit mindset” right.

Your debt to credit ratio is your ratio of debt to total available credit you have been extended (revolving accounts only). For example. If you have $10,000 in total unsecured revolving credit accounts and you’re currently in debt $2500, then your debt to credit ratio is 25%. Since the main way lenders make money is by charging interest, one of the elements of the credit scoring model is driven by your ability to maintain balances and pay over time. This shows your true (long term) credit worthiness which is most profitable to lenders since they make money primarily via interest and not annual fees.

Over the years we’ve discovered without question that carrying the proper debt to credit ratio will boost your score faster than paying off your bills in full each month. I have argued with the Better Business Bureau on this topic for and they still disagree (despite my sending them proof from Fair Isaacs own website http://www.MyFico.com the organization which invented the credit scoring software used by credit bureaus).

Of course, what do you do if you’re like most Americans and your debt to credit ratio is too high? For example. You have $10,000 in unsecured revolving accounts but you owe $8500, thereby giving you an 85% debt to credit ratio. How can you bring it down without selling everything you own? The answer is simple and takes us to the next technique which is…

SUB-PRIME MERCHANDISE CARDS: The single most cost effective (and powerful) tool for consumers to increase their high credit limit and decrease their debt to credit ratio is the use of Sub-Prime Merchandise Cards which report to one of more of the major credit bureaus.

Unfortunately, despite their immense benefits, these are the most misunderstood cards in the credit industry. A large portion of the misunderstanding is due to marketers misrepresenting the cards and the growing number of companies promoting them. When you learn how they work one quickly understands why they have been the subject of much misrepresentation.

A Sub-Prime Merchandise Card is nothing more than a card attached to a line of credit which allows you to buy merchandise from a specific vendor (usually the company that sold you the card). The merchandise (in most cases) will be purchased through a catalog or online mall.

Where the problem arises is that the cards are marketed almost exclusively to the sub prime market via email, telemarketing and direct mail etc. The reason for this is they can advertise almost irresistible offers like “$5,000 Credit Card… GUARANTEED! No Credit Check! NO Cosigner! You cannot be turned down!” or “Unsecured $10,000 Credit Line! Everyone Approved!”. I’m sure you get the idea…

While there are many companies which do this and are a “shady at best”, there are a few which do it legitimately and it’s the best kept secret to build your credit and build it fast.

Here’s how it works: the company approves anyone with a pulse (literally) and gives them a card for $2,500 to $12,500 with NO credit check and NO cosigner. However, the card is only good for merchandise through their website or catalogs and the consumer is required to put down a deposit on whatever they purchase. After the deposit is paid, the remaining balance is financed on the card.

For example. A person buys $1,000 worth of merchandise. Their deposit is $300 so they then finance $700 on their merchandise card and make payments. Sound like a scam? If you say “Yes” like most people then you’re missing the point… big time.

With a legitimate Sub-Prime Merchandise Card your credit line WILL be reported to at least one major credit bureau (or more). This means if you get a $5,000 card and you finance $500, on your credit report it will look like any other credit card and will do three extremely important things for you.

1.) It will increase your current “High Credit Limit” by $5,000 almost overnight as the account “looks” like any other unsecured revolving account.

2.) By carrying a small outstanding balance it will positively impact your credit report by building and showing potential lenders your credit worthiness.

3.) With a good payment history you are virtually guaranteed to receive “legitimate” pre-approved credit offers in the future due to other lenders renting your name from the credit bureaus.

This technique is hard to beat for both cost and effectiveness. Of course, the whole key is knowing exactly which cards report to the credit bureau and offer the best rates. The only thing more effective is…

PIGGYBACKING: Despite its’ virtually unlimited potential, piggybacking is not used by nearly as many consumers as it should be. It’s easy, effective, and extremely fast. Unfortunately, it’s mostly used among parents and siblings while those who can really benefit stay in the dark.

How it works. Almost every credit card or credit account will allow the primary account holder to add on (at a later date) what’s known as an “Authorized User” or “Secondary Account Holder”. In most cases, when this is done, the entire account history (retroactively) gets posted to the authorized users credit report regardless of their current age or credit history!

For example. If it’s a credit card with a $10,000 limit which has been paid as agreed for the last 10 years, then that complete history will be posted to the authorized users’ credit report. I once saw a clients’ credit report who used this technique with his mother. He was only 24 at the time and he had a $15,000 Gold credit card on his report with history going back 11 years! I laughed as I thought to myself that this kid would have had to be approved when he was 13 years old for this account to be his!

As you can see, this strategy is usually only used by parents and their children and in most cases with no regard to the benefits the children are reaping credit wise! In fact, in recent years, due to its’ effectiveness, this technique has led individuals with excellent credit scores to “rent out” authorized user accounts on one or even multiple credit cards in return for a fee! I once recall seeing an ad in USA TODAY for just such an opportunity. Like most good credit loopholes, I’m sure this methods’ days are numbered much like what may be the case with…

ADVANCED CREDIT PROFILING: This is a strategy while not complex, can be taken to very complex levels. Even in its’ most basic form, it’s taken advantage of by very, very few. It involves intentionally building your credit report in a way which creates a “profile” that closely fits the criteria of most lenders (as well as the overall credit scoring system). Again, this is a technique which can be used in a myriad of complex ways, but for simplicity I will explain it in its’ most basic form.

While many consumers will boast when they have 10, 20, 30 or even 50 thousand dollars worth of credit cards on their report, many of these same people do NOT have even one mortgage, automotive loan or lease, equipment loan or a even a line of credit with a local bank or credit union. These other forms of credit create a much more well rounded credit profile for the consumer. This is achieved by showing greater credit account diversity and experience with multiple types of credit due to the various lines held.

For example. A person with $50K in credit cards does not represent near the credit experience as a person with the same $50K along with a mortgage, an automotive loan and an equipment lease. We have clients who have financed vehicles not because they had to (or even wanted to) but because they “needed to” in order to create a credit profile that would position them in the future to secure the lowest possible rate on a mortgage when they applied and needed it.

More complex forms of Advance Credit Profiling involve one subscribing to affluent or semi-affluent business and professional publications and organizations. These would include magazines, newsletters, trade journals and national associations. The goal is to get ones name into the databases of these publications and organizations. Why? To get on highly targeted lists in order to receive select credit offers.

Marketers of credit offers have found that simply renting names of consumers from the credit bureaus does not provide enough information about the person as a credit risk anymore. Therefore, it is speculated that many will rent a list from the credit bureau and then cross-reference this list against another list they have secured from a consumer source such as an affluent business or professional publication, trade journal or organization.

By crossing the two lists together the marketers find the names contained on both lists. This in turn provides them with one highly refined and targeted list to mail their offer to. This results in shortening the process of securing a new quality account holder thus lower the overall account acquisition cost of new accounts.

When a consumer learns how to intentionally put themselves into these databases to wind up on these refined lists, the credit building process is sped up exponentially. Of course, many would call this “highly speculative” but we have undeniable experience that it works.

DEPOSIT LOAN PROGRAMS: This is a technique so unbelievable that I myself proclaimed it had to be a scam before researching the facts. It allows the consumer (or business) to have a $25,000 to $250,000 loan appear on their credit report as “Paid as Agreed” by way of very creative financing. This method is extremely effective and not within the budget of most ($750 to $7,500 upfront). Also, because this technique takes advantage of certain banking laws, I have reason to believe it could be made unavailable at any time if those banking laws were to change. This method can be used with consumer credit files on SSN’s as well as business and corporate credit files done on TIN’s as well as Dunn and Bradstreet.

In the end, all of us need to remember that today our credit score is more important than it has ever been in the history of the credit reporting system. While credit miracles don’t happen overnight, you can create your own credit miracles by applying simple insider strategies consistently over time. Before you know it, you’re a proud member of the 700 Club. The “700 Plus Credit Score” club that is!

Okay, so you are in debt and are not sure how you will ever get out of the hole you have dug for yourself. The phone rings all day long as collection agents attempt to collect debts you accumulated during the time you were in financial crisis. You feel helpless, out of control, not knowing how to respond to these calls because you simply don’t have the money to pay off your debts and still eek out a meager existence. Below are some things you need to know in order to better respond to the collectors on the other end of the phone.

The first thing you need to know is that good collectors are prepared with facts and figures, records of past conversations, and a wealth of ‘closes’ designed to get you to pay up. Imagine this picture…The collector calling you is sitting in a comfortable chair looking at a computer screen that displays all of the relevant data about the debt the collector is attempting to collect. The screen has information about the creditor on whose behalf the collector is working, the amount of the debt claimed, a record of all recent phone calls including those made but for which there was no connection made. The collector also has more detailed records available at the click of a mouse so that during any conversation you can be reminded of anything you said or did over the telephone. Knowledge places the collector in the enviable position of aggressor. You, on the other hand, are unprepared for the phone call and have none of the relevant information directly at your fingertips. This places you in a defensive posture from the start.

Additionally, it is important to remember that collectors are well trained in a number of techniques for ‘closing the sale’ or, in other words, collecting the debt in full. They are trained to keep the conversation as short as possible, knowing the longer they are on the phone with you the more likely they are to make a legal error thereby nullifying the ability to collect the debt. Only if they sense a ‘kill’ or if they are trying to solve a problem will they stay on the phone longer than one or two minutes. Often, collection agencies place a quota of calls that must be made per hour and/or create a collection to call ratio as a quota. In either case, it is important for the collector to keep the conversation short and simple while still attempting to collect the debt.

Collectors are often paid a percentage of what they collect and are paid handsome bonuses for reaching and exceeding their collection goals. This fact places considerable pressure on the collector to make the ‘sale’ by collecting the money owed–and as much of the money owed as is possible at the moment they are on the phone with you.

If a collector calls they will ask to speak to you. If you are unavailable they are not to inform the person answering the phone that they are attempting to collect a debt. They will ask that you return their phone call as soon as possible and will provide their name, a contact phone number and, often but not always, a reference number to use when you call back. That’s it. So when you call back you are still on the defensive because before an agent gets on the phone to speak with you they have pulled your digital file and are reading it on their screen.

Collectors are also obligated to verify that you are really the right person so they will ask for additional information to verify your identity. Often they will ask for your social security number. I suggest that you respond only with the last 4 (at most 5) numbers of your SSN. If they ask for your address ask them to tell you what their records show and you will verify if that is correct or incorrect. Also, the collector does not want to identify for whom they work or what creditor they represent until information is verified. You should demand that they make that identification before you divulge any personal information. This is a matter of protecting your identity in this age of identity theft.

Creditors are trained to inform you of the reason for their call and then they will use the oldest trick in the books to get you to speak first…They will go silent. The idea is that if they create a vacuum of silence you will be the first to fill that vacuum. Don’t. Wait for the collector to speak first. After about 10 to 13 seconds the collector will begin speaking again, perhaps asking what your intentions are with regard to the debt in question. If you are in a position to pay all or part of the debt then make an offer of settlement. Make sure that the offer you make is well within your ability to pay because you can be certain that you will receive a counter offer. It is also a good idea to make the settlement offer precise. Let’s say you owe $849.47 to the Acme Widget Company and the debt is legitimate.

Since it has been placed in the hands of a collection agent Acme has written off the debt. Also, it is quite likely that ABC Collection Agency purchased the bad debt from Acme for a substantial discount. ABC makes its money by collecting more than they paid for the debt in the first instance. ABC may also charge Acme a commission for collection and pay the difference back to Acme. The point is there is a minimum that the collector can settle for and still make a profit on its operations. But back to the $849.47 debt. If you make an offer of $300.00 to settle you will generally receive a higher counter offer than if you offer say $279.50. The psychology of the precise offer is that you give the impression that you have carefully considered the possibilities and what you can realistically afford at this moment, that you have a genuine desire to clear this debt off the books and they you have the money on hand to make the payment. The $300 offer is too general to communicate that kind of precision.

If you only provide an excuse for non-payment the collector sees this much in the same light that a well trained sales professional sees an objection and employs a series of counter measures to combat the objection. You will be subjected to a series of questions and demands such as:

A verification of information on your account A suggestion that you borrow funds from relatives A suggestion that you pay the full amount is easy monthly installments drawn directly from your checking account You will be asked on which day you are paid from your work If you make a settlement offer they will counter with a figure higher than you suggest that will be at the top of where they believe you can realistically pay

In the final analysis, the collector will often not settle for a verbal commitment to pay but will want a commitment in writing accompanied by your payment.

Don’t burden collectors with your sad tales of woe. First, they don’t care about your personal tragedies. Secondly, they are trained to respond with a sympathetic remark and then ask when you will be able to pay up.

Finally, remember that collectors keep good notes of each and every conversation they have with you. The purpose of these notes beyond record keeping is to find areas of contradiction in your story so that you may be tripped up in future conversations. I suggest that you do two things.

First, keep excellent records of your conversations yourself. Note to whom you are speaking and clarify any promises you make to them or offers they make to you. If your records are as good as theirs then you may be able to neutralize their aggressive advantage. Secondly, keep your conversation to a minimum and make no commitments you are unwilling or unable to keep.