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7 Tips to Increase Your Credit Score |
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Having a high credit score can mean the difference of thousands
of dollars of saved interest expense compared to others with a
lower score. For example, if you improve credit score results
from the credit bureaus, just a few points that increase your
credit score can make huge difference in the interest rate you
will pay for a home purchase. It pays to increase your credit
score!
The most commonly used credit scores available to lenders are
FICO scores, which is a scoring method created by Fair, Isaac &
Co...FICO!
These scores are provided to lenders by the three major credit
bureaus: Equifax, Experian and TransUnion. Before we get into
some tips how to improve credit scores, it pays to review the
major areas that determine your FICO score.
1. Payment history on credit and retail store cards, loans and
mortgages. 2. Amount that you owe. Credit agencies look at how
many accounts have balances and the proportion of that balance
to the credit line. 3. How long is your credit history? The
longer the better. 4. New credit accounts. Applying for a bunch
of credit cards all at once can hurt your score. 5. Different
credit types, such as mortgages, retail loans, credit cards and
installment loans. 6. How many late payments do you have?
Now, with the playing field laid out, let's work to boost your
credit score! Some methods that boost your credit score take
time, months |
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or years, and others areas to improve credit score
can be made with a phone call right now! That said, here are the
7 tips to raise your credit score!
7 tips to improve credit scores
1. Pay your bills on time. Your payment history is a major
factor (35% of your FICO score) in determining your credit
score. If you pay your bills late, or had an account referred to
collections, your credit score will take a major hit. 2. Sign up
for online banking and make sure your regular recurring bills
are paid automatically. This way you will not forget a payment
that will wind up reducing your credit score. 3. Increase your
credit limit. Another large factor is the amount of your debt in
relation to your credit limit. If you have a card with a $10,000
credit limit and your balance is $9,000, this will not help to
improve your score. To make the debt/credit limit ratio look
better, you can try to call your credit card company and request
an increase in your credit limit. Don't use the extra credit
though! That defeats the whole purpose and puts you further in
debt! 4. Don't apply for many cards at once. This will not
improve your credit score because this is a characteristic of
high credit risk groups. 5. Don't ever close an open credit card
account. If you pay off a credit card down to a zero balance,
leave it open. Remember that a positive factor for your credit
score is how much available credit |
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Interested in an unsecured loan? This article is good background reading
If you are selfemployed and want a loan, this article is a useful read.
This article discusses the importance of doing your research before signing up for a personal loan.
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