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. 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 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 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. 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 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. 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. 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 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 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. 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 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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For more tips on how to improve credit score or to see another article about how to remove credit card judgments visit us.
posted by Credit Counseling at
3:37 AM
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