7 Steps to Improve Your Credit Score
There are 7 steps to improve your credit score.
If you want to enhance your credit score score, it won’t happen in one day. In this article, BetterCredit explains how to improve your credit score in the following ways.
The fact is, your credit score score isn’t like a race car. You can’t just rev the engine and immediately get to a higher score.
Instead, your credit score ratings are more like your driving record: The credit companies consider the history of your credit in order to compute your credit score, not only your present actions.
7 Steps to Elevate Your Credit Score
- Watch your credit card balances
- Eliminate credit card balances
- Remove old debt from your report
- Use your calendar
- Pay bills on time
- Don’t hit the limit
- Better Credit will help improve your credit score
Watch Your Credit Card Balances
One of the most important factors for your credit score rating is how much revolving credit you have versus how much you’re using. The smaller that percentage is, lenders will view your credit rating in a better light.
Your goal should be to have lower than 30% of your available credit in use.
To improve your score, pay down your balances and maintain an overall low balance. If you have more than one credit card, consolidating them with a personal loan may increase your score.
Recognise that even if you pay balances in full every month, you may have a higher utilization ratio than you’d anticipate. That’s because some issuers use the balance in your statement as the one they send to the credit bureau. Even if you’re paying balances off monthly, your credit score will nonetheless weigh by your month-to-month balances.
One method: See if the credit card company will allow you to submit a couple of payments throughout the month.
Remove Credit Card Balances
An amazing way to enhance your credit score rating is to eliminate your balances. One of the ways companies like Equifax determine your score is by how many cards you have versus card balances.
If you have several cards with high balances, you’ll end up being charged a lot more each month. This formula can harm your credit rating.
The solution to enhance your credit score is to either begin paying off all of the small balances or pay the cards with the highest interest rates. Some find it helpful to consolidate all the balances into one monthly payment.
You’ll need to discuss all of your options with your accountant or with your financial advisor.
If you can’t find the money to pay these small balances off immediately, consider moving them to a credit card with the lowest interest rates available.
Leave Old Debt On Your Report
Some people overwhelmingly agree with that old debt on their credit report is terrible.
The minute they get their car or home paid off, they’re looking to get it eliminated from their credit score report.
Items that negatively affect your credit rating typically disappear from your record after seven years. If it has been over seven years and you find old debts still on your credit report, we recommend that you contact those companies and request they remove them.
Another way to improve your credit score score, once you’ve removed old debts is to keep accounts open where there’s available credit not in use. This also increases your credit to debt ratio and enhances your creditworthiness.
Use Your Calendar
In case you’re looking for a home, vehicle or student loan, it benefits you to find the best rates.
Anytime you consider financing a purchase think of your credit score well in advance. How will you be affected long-term? Multiple purchases on your cards can benefit if you keep the above information in mind.
Your FICO rating, a credit score commonly utilized by lenders, ignores inquiries made within the last 30 days. It reports on missed payments which are older than 30 days, it then takes an average of the shopping period as just one inquiry.
The period of that shopping length depends on the credit score rating used.
If creditors are using the most up-to-date types of scoring software, then you have forty five days before a report is submitted to the credit bureaus.
Pay Payments On Time
If you’re making plans for a large purchase, you’re likely planning to make a large down payment.
If you’re planning to make payments, we recommend you set a date on your calendar to ensure the payments are made on time. Most of our clients set up automatic payments with their bank.
Despite the fact that a company may not report a late or missed payment to your creditor, they may send the missed payment to collections. If this happens, the unpaid bill will be placed on your credit history report, which ultimately reduces your score.
Don’t Hit The Limit
We all know that things happen. One day your credit card balances are very low and an unexpected event requires you to use almost every card you own.
These events not only weigh heavily on your mind, but can have a major affect on your credit report.
If you find that you’re unable to pay off your high credit card balances, call your credit card companies and explain your situation. They might be able to work with you or at the very minimum give you information on what you can do to decrease your balance.
Better Credit Will Help Improve Your Credit Score
Once you’re ready to improve your credit score, get all of the information you can about any unpaid bills or missed payments. When you have all of the documents in front of you, you are able to
decide what’s accurate and what items need to be disputed.
Many of our clients find that there are several entries on their report that can be disputed and removed from their records.
At BetterCredit we work with you and your creditors until we’re able to make major improvements to your credit score. We save our clients time and money, and significantly increase their quality of life.
We call and send letters to multiple companies on your behalf, which works consistently for each of our clients. Since several things make up your credit score, it’s necessary for companies like BetterCredit.com, who understand the regulations, to speak with them directly.
Did you know? Every year you’re entitled to a free report from each of the three credit bureau companies (Equifax, Experian and TransUnion) through AnnualCreditReport.com.
Better Credit is ideal for anyone who believes their credit history has been negatively affected. If you’re concerned that a low credit score is preventing you from obtaining better interest rates for large purchases, contact us today.