There are many ways you can improve your credit score. These are some of the 8 Best Tips To Increase Your Credit Score. One of them is to own credit cards and regularly pay off your payments.
This will show that you are reliable and can be trusted with credit.
Regularly pay off your balance, and are on time with gas, phone, electric, and utility bills, this also can help. In the long run, it is worth it for you to keep your credit good.
Because, this means you qualify for better interest rates, bigger lines of credit, equity line of credit, home equity line of credit, low APR credit cards, and all kinds of other financial benefits that you wouldn’t have otherwise.
Really, it’s easy and you’ve got nothing to lose.
Having a high credit score can mean the difference of thousands of dollars of saved interest expense. If you increase your credit score from the credit bureaus just a few points; that increase in your credit score can make huge difference in the interest rate you will pay.
It pays to increase your credit score!
The most commonly used credit scores available to lenders are FICO scores, which is a scoring method created by Fair, Isaac & Co…FICO!
These scores are provided to lenders by the three major credit bureaus. It is best to get all 3 credit reports because they can be useful for a variety of reasons.
So to get a good credit report, you have to use all 3.
Many institutions rely on the information contained on your credit report before they will approve you for credit. And, knowing your credit record can give you a heads up on your chances of receiving credit.
Fortunately, you can get all 3 credit reports for free, and this will tell you all you need to know about your credit.
There are a number of places you can receive your free online credit reports like annualcreditreport.com. You’re entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies.
Before we get into some tips how to increase your credit scores, it pays to review the major areas that determine your FICO score.
- Payment history on credit and retail store cards, loans and mortgages.
- Amount that you owe. Credit agencies look at how many accounts have balances and the proportion of that balance to the credit line.
- How long is your credit history? The longer the better.
- New credit accounts. Applying for a bunch of credit cards all at once can hurt your score.
- Different credit types, such as mortgages, retail loans, credit cards and installment loans.
- How many late payments do you have?
Now, with the playing field laid out, let’s work to boost your credit score! Some methods that boost your credit score take time, months or years, and others areas to improve credit score can be made with a phone call right now!
That said, here are the 8 tips to increase your credit score!
8 tips to increase your credit scores
1. The most important tip is to check for errors on your credit report. Most credit reports contains some type of errors that can be fixed with a letter explaining the error.
The best thing to do is examine your credit report for errors and contact the credit reporting agencies to fix any errors on your credit report.
2. No that you have cleared the errors, its time to dispute inaccurate information provided by your creditors. This can include a variety of misinformation from non-payment, to closed accounts.
The POWER OF THE DISPUTE LETTER. The dispute letter is used to dispute any inaccurate information contained on your credit report.
It is as simple as sending a letter with your identity information, the creditor with the inaccurate information, and proof of the inaccurate entry.
The credit bureaus are required by law to remove that information until it has been investigated, and remove if from your credit report if not verified in 30 days.
3. Don’t ever close an open credit card account. If you pay off a credit card down to a zero balance, leave it open.
Remember that a positive factor for your credit score is how much available credit you have at your disposal when compared to your credit balance, in addition to the length of your credit history.
4. Pay your bills on time. Your payment history is a major factor of your credit score and used in determining your credit worthiness. If you pay your bills late, or had an account referred to collections, your credit score will take a major hit.
5. Sign up for online banking and make sure your regular recurring bills are paid automatically. This way you will not forget a payment that will wind up reducing your credit score.
6. Increase your credit limit. Another large factor is the amount of your debt in relation to your credit limit. If you have a card with a $10,000 credit limit and your balance is $9,000, this will not help to improve your score.
To make the debt/credit limit ratio look better, you can try to call your credit card company and request an increase in your credit limit.
Don’t use the extra credit though! That defeats the whole purpose and puts you further in debt!
7. Don’t apply for many cards at once. This will not improve your credit score because this is a characteristic of high credit risk groups.
8. Apply for loans within a two-week period. Every time you request a loan and the lender pulls your credit report, it can hurt your score. It is part of the FICO formula that reasons “this person is trying to apply for credit and loans and possibly be trying to live way beyond their means!”
If you keep the loan process within a two-week period, all of the credit report lookups are bundled together as one single request!
If you take action and follow these tips, you will be able to give your credit score and immediate boost. And, gradually increase your credit score even more as time passes.
The major keys are to examine your credit reports, pay your bills on time, and reduce your debt amounts. This has a twofold benefit of improving your credit score and reducing your debt.
If you take care of your credit score, you can enjoy great credit for many years.
Are you ready to increase your credit score? If so, follow the tips recommended to you by Inker Street Consumer Credit Advice.
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