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 incorrect. If you take a few steps you can positively influence your credit score.
1. Disputing and removing bad credit items on your report. You can do this yourself or hire a service but it will help your score the most.
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. Pay your bills on time. It is alleged that missing one monthly payment can cause your score to drop by up to 50 points.
4. Open a new line of credit. You will get the most benefit if this is a revolving line of credit. We recommend an unsecured credit card.
By paying your monthly bill you will develop a positive payment history. This is a heavily weighted factor when your score is being calculated. If your score is currently to low to get an unsecured credit card then open a secured card just make sure it reports to all three bureaus.
In addition by keeping your balance at approximately 10% of the credit limit it will build the most credit. This shows that you use your credit and 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 are the only factors you should focus on when improving your credit score. There is one last tip that is surrounded in controversy.
6. Piggy back credit, this is when you are added as an authorized user on an account with a high credit limit and low balance. The benefit you get is the account is not reported on your credit history.
This tactic was widely abused and the scoring model has made some changes. It is said to have removed the benefit however it is debated as to if those changes have taken place yet.
In sum, focus on steps one through five and you are on your way to a 700 credit score. You don't have to live with bad credit you can increase your score and your quality of life.
This is incorrect. If you take a few steps you can positively influence your credit score.
1. Disputing and removing bad credit items on your report. You can do this yourself or hire a service but it will help your score the most.
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. Pay your bills on time. It is alleged that missing one monthly payment can cause your score to drop by up to 50 points.
4. Open a new line of credit. You will get the most benefit if this is a revolving line of credit. We recommend an unsecured credit card.
By paying your monthly bill you will develop a positive payment history. This is a heavily weighted factor when your score is being calculated. If your score is currently to low to get an unsecured credit card then open a secured card just make sure it reports to all three bureaus.
In addition by keeping your balance at approximately 10% of the credit limit it will build the most credit. This shows that you use your credit and 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 are the only factors you should focus on when improving your credit score. There is one last tip that is surrounded in controversy.
6. Piggy back credit, this is when you are added as an authorized user on an account with a high credit limit and low balance. The benefit you get is the account is not reported on your credit history.
This tactic was widely abused and the scoring model has made some changes. It is said to have removed the benefit however it is debated as to if those changes have taken place yet.
In sum, focus on steps one through five and you are on your way to a 700 credit score. You don't have to live with bad credit you can increase your score and your quality of life.
About the Author:
To learn more about how to remove judgments, charge offs, late payments, collections or any negative mark or to learn about lexington law firm a professional credit repair service visit us.
posted by Credit Counseling at
9:51 PM
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