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 wrong. You can focus on a couple easy steps and develop a good 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 line of credit. You will get the most benefit if this is a revolving line of credit. We recommend an unsecured credit card.
When you make your monthly payment you will be creating a positive payment history. This is a very large part of your credit score. If you have difficulties opening an unsecured credit card then get a secured card. Double check and make sure your credit card is reported to all three major bureaus.
Your score will get a bump if you can keep your balance at approximately 10% of your credit limit. This shows that you do use your credit and that you 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 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 wrong. You can focus on a couple easy steps and develop a good 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 line of credit. You will get the most benefit if this is a revolving line of credit. We recommend an unsecured credit card.
When you make your monthly payment you will be creating a positive payment history. This is a very large part of your credit score. If you have difficulties opening an unsecured credit card then get a secured card. Double check and make sure your credit card is reported to all three major bureaus.
Your score will get a bump if you can keep your balance at approximately 10% of your credit limit. This shows that you do use your credit and that you 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 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.
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posted by Credit Counseling at
12:14 PM
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