How To Improve Credit Score
Improving your credit score can seem like a daunting task. The credit bureaus claim to factor in hundreds of things and you have no direct control over your score.
Well they are wrong. No matter how bad your credit score is you can take a couple easy steps and improve it.
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. Pay off any verified bad credit item on your report. In exchange for your payment have the lender remove the item from your credit report.
3. Pay your bills on time. It is estimated that missing a payment can damage a good score by up to 50 points.
4. Open a new credit line. This is best if it is a revolving line of credit, for example 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 off large debt. Your score will get a bump if you have high available credit to debt. The bureaus want to make sure you are not overextended and by showing them you have available credit your score will get a bump.
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 by doing step one through five you will improve your score dramatically. With an improved credit score you will finally be able to have the quality of life you truly deserve.
Well they are wrong. No matter how bad your credit score is you can take a couple easy steps and improve it.
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. Pay off any verified bad credit item on your report. In exchange for your payment have the lender remove the item from your credit report.
3. Pay your bills on time. It is estimated that missing a payment can damage a good score by up to 50 points.
4. Open a new credit line. This is best if it is a revolving line of credit, for example 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 off large debt. Your score will get a bump if you have high available credit to debt. The bureaus want to make sure you are not overextended and by showing them you have available credit your score will get a bump.
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 by doing step one through five you will improve your score dramatically. With an improved credit score you will finally be able to have the quality of life you truly deserve.
posted by Credit Counseling at
5:58 PM
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