Improve Credit Score – What You Need To Do
If you are sick of living with bad credit or just want to make sure you will be approved for an upcoming purchase it is wise to use these tips to make sure you can get the highest FICO score possible. This three digit number will determine if your approved, the interest rates you pay, and will have a direct correlation to the lifestyle you live.
1. Pay bills on time – this sounds like common sense but it isn’t! One of the most important pieces of information to your credit score is your payment history. Even if you have some negative items in your past, if you are currently and have been paying your bills on time it will help tremendously! Make sure that you don’t have late payments as this will only contribute to bringing down your overall score.
2. Have available credit – this is called your available credit to debt ratio. When your FICO score is calculated they will look at how much debt you currently have and how much unused credit you have. Obviously the more debt and less available credit the lower your score will be and vice versa.
Even if you have some big purchases and sizeable debt such as a home loan, car loan, education loans if you can show that you have credit that you aren’t using it will help your score. For example, with a credit card if you can keep your monthly balance at roughly 25% of your credit limit it will give your score the most benefit. This is because it shows you are using your credit but using it responsibly and not maxed out financially.
3. Limit the number of credit inquiries – a credit inquiry is when you have your credit checked. The more often your credit is being checked it can negatively impact your score. This is because it appears that you’re constantly seeking new lines of credit. If instead you have a reasonable number of checks for instance 6 a year it appears more natural.
4. Live within your means – this is also common sense but looking back what got most of us to a positing where we needed to improve our credit was because we were living outside of our financial means. Its ok, you’re not alone and it’s a mistake. We all make mistakes and further its just money. However with that experience moving forward make sure to take a minute and make sure you can afford future purchases.
5. Remove bad credit items – your credit score can see a huge jump if you can remove old negative items from your report. Contrary to popular belief you don’t have to just live with these marks. You can file a credit dispute and have the bureaus investigate these items and potentially remove them from your report. You will likely see the most benefit to your score using this step.
In sum, follow the outlined five steps and you will see your credit score improve dramatically. End the embarrassment and fear of rejection when apply for new credit or using financing when making purchases. Let us not forget the high cost of high interest rates, down payments, and lifestyle sacrifices such as renting instead of owning a home.
For a free credit consultation call 1-800-232-2903 or to learn more about how to improve credit score visit us or for more about how to clear bad credit.