How To Improve Your Credit Score
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.
Well they are wrong. No matter how bad your credit score is you can take a couple easy steps and improve it.
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 estimated that missing a payment can damage a good score by up to 50 points.
4. Open a new line of credit. Your score will receive the most benefit if you have a revolving line of credit. We suggest 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 down you large debts. This will help your ratio of available credit to debt. The bureaus want to see that you are not in over your head and the best way to show this to them is by having available credit.
These are the five factors you should focus your efforts on. There is however one last factor that is surrounded by controversy.
6. Piggyback credit, this is where you become an authorized user on a high credit limit credit card. The benefit is this account is now reported on your credit report and adding a tremendous boost.
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, 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.