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 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.
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.
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 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 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.
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.
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.
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 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 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
9:04 AM
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