How To Improve Credit Score
To improve your credit score can seem like an impossible task. The scoring model seems to factor in tons of information and makes it seem as if you have no control over your score.
This is incorrect. If you take a few steps you can positively influence your credit score.
1. Dispute and remove negative items on your credit report. This can be done yourself or you can hire a service to do it 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 alleged that missing one monthly payment can cause your score to drop 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.
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.
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 your large debts down. This is called your available credit to debt. The bureaus need to see that you are not in over you head and that you do have credit that is not being used.
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. Piggyback credit, this is when you are added as an authorized user to a good credit card account. The benefit is this account is now reported on your credit report.
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 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 incorrect. If you take a few steps you can positively influence your credit score.
1. Dispute and remove negative items on your credit report. This can be done yourself or you can hire a service to do it 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 alleged that missing one monthly payment can cause your score to drop 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.
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.
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 your large debts down. This is called your available credit to debt. The bureaus need to see that you are not in over you head and that you do have credit that is not being used.
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. Piggyback credit, this is when you are added as an authorized user to a good credit card account. The benefit is this account is now reported on your credit report.
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 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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posted by Credit Counseling at
9:03 AM
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