How To Improve Credit Score
Improving your credit score can seem like an impossible task. This is because there is so much contradictory information and the scoring model makes you feel as though you have no direct control over your credit score.
This is wrong. You can focus on a couple easy steps and develop a good credit score.
1. Remove bad credit items on your report. You must dispute the credit bureaus directly with either a dispute letter or by hiring a service to dispute them on your behalf.
2. If an item is verified then work out a way to pay them in exchange have the item removed from your your credit report.
3. On time bill payment. It is rumored that missing a payment can damage your score up to 50 points.
4. Open a new line of credit. Your score will receive the most benefit if you have a revolving line of credit. We suggest an unsecured credit card.
This will also help you build a positive payment history by paying your monthly bill. However if you can not qualify for an unsecured credit card then open a secured card, but make sure it reports to all 3 bureaus.
Your score will get a bump if you can keep your balance at approximately 10% of your credit limit. This shows that you do use your credit and that you use it responsibly.
5. Pay down you large debts. This will help your ratio of available credit to debt. The bureaus want to see that you are not in over your head and the best way to show this to them is by having available credit.
These five factors are the only things you need to concern yourself with when trying to improve your credit score. There is one last factor however it is shadowed in controversy.
6. Piggyback credit, this is where you become an authorized user on a high credit limit credit card. The benefit is this account is now reported on your credit report and adding a tremendous boost.
This tactic has been widely abused and the scoring model has adjusted its formula to discount authorized users. However there is a debate over if this change has occurred yet or not.
In sum if you can take care of steps one through five then you will improve your score. With a high credit score your quality of life will also improve.
This is wrong. You can focus on a couple easy steps and develop a good credit score.
1. Remove bad credit items on your report. You must dispute the credit bureaus directly with either a dispute letter or by hiring a service to dispute them on your behalf.
2. If an item is verified then work out a way to pay them in exchange have the item removed from your your credit report.
3. On time bill payment. It is rumored that missing a payment can damage your score up to 50 points.
4. Open a new line of credit. Your score will receive the most benefit if you have a revolving line of credit. We suggest an unsecured credit card.
This will also help you build a positive payment history by paying your monthly bill. However if you can not qualify for an unsecured credit card then open a secured card, but make sure it reports to all 3 bureaus.
Your score will get a bump if you can keep your balance at approximately 10% of your credit limit. This shows that you do use your credit and that you use it responsibly.
5. Pay down you large debts. This will help your ratio of available credit to debt. The bureaus want to see that you are not in over your head and the best way to show this to them is by having available credit.
These five factors are the only things you need to concern yourself with when trying to improve your credit score. There is one last factor however it is shadowed in controversy.
6. Piggyback credit, this is where you become an authorized user on a high credit limit credit card. The benefit is this account is now reported on your credit report and adding a tremendous boost.
This tactic has been widely abused and the scoring model has adjusted its formula to discount authorized users. However there is a debate over if this change has occurred yet or not.
In sum if you can take care of steps one through five then you will improve your score. With a high credit score your quality of life will also improve.
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To learn more about how to remove a charge off or for a free credit repair letter visit us.
posted by Credit Counseling at
9:01 AM
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