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 incorrect. If you take a few steps you can positively influence your credit score.
1. Remove bad credit items on your report. You must dispute the credit bureaus directly with either a dispute letter or by hiring a service to dispute them on your behalf.
2. If you have a bad credit item verified or delinquent account then pay them. Work out a payment plan and have them remove the negative credit item in exchange for your payment.
3. On time bill payment. It is rumored that missing a payment can damage your score up to 50 points.
4. Open a new credit line. This is best if it is a revolving line of credit, for example 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 try to keep your monthly balance at 10% of your available credit. Doing this shows the bureaus that you do in fact use your credit and 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 five factors you should focus your efforts on. There is however one last factor that is surrounded by 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. Remove bad credit items on your report. You must dispute the credit bureaus directly with either a dispute letter or by hiring a service to dispute them on your behalf.
2. If you have a bad credit item verified or delinquent account then pay them. Work out a payment plan and have them remove the negative credit item in exchange for your payment.
3. On time bill payment. It is rumored that missing a payment can damage your score up to 50 points.
4. Open a new credit line. This is best if it is a revolving line of credit, for example 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 try to keep your monthly balance at 10% of your available credit. Doing this shows the bureaus that you do in fact use your credit and 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 five factors you should focus your efforts on. There is however one last factor that is surrounded by 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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