We all know how important our credit scores are in so many areas of our lives. This blog is going to offer some tips to improve your credit score.
Quick reminder credit scores range from the high 400’s into the mid 800’s. Ideally you want to shoot for a credit score of 740+.
#1. Know what is reported on your credit report. You can get a free copy from AnnualCreditReport.com . Check your credit report for any errors: credit limits, late payment, collection items (that are not yours!). Make sure your credit reports are reporting accurate account balances and payments.
#2. Pay your bills on time. Paying your mortgage, credit card, installment loans and car payment 30+ days late will be reported on your credit report reducing your credit score.
#3. Ask for the removal of any negative credit. This might and I said MIGHT work, It has worked on a few scenarios where the negatives were removed after paying on time for a specific amount of time and hey it never hurts to ask. This typically can happen if you have a long standing paid as agreed account and you had a 30 day late.
#4. Reduce credit card balances to 30% or less. Example if you have a Visa with an available limit of $5,000 Do Not take your current balance above $1,500. A credit card with a higher balance (more than 30%) is considered higher risk in the calculation of the credit score and can reduce your score down 50 points! Yes you read that right 50 POINT reduction for a maxed credit card.
#5. Don’t close any credit cards. This can have a negative effect on your credit score. If you want to get rid of them cut them up but don’t close the account. And older credit cards accounts that you have had for sometime. Once you pay those older accounts down to zero balance use it occasionally and then pay the balance off within 2 months and remember don’t use more than 30%. Remember credit cards are supposed to be used for NEEDS Not WANTS!
#6. Limit your credit inquires. Did you realize than when your credit is pulled your credit score will take a negative hit of 5 – 10 points. So when you are shopping for a car or house you have about a 1 week window where if the same type of lender pulls your credit you will only take 1 negative hit to your credit score.
#7. Open a secured credit card or installment loan. These are secured loans that many times banks offer. You will put a specific amount into a bank account, CD or money market and then the bank will offer you a secured loan or credit card.
#8. Become an authorized user: Ask a family member to make you an authorized user on their credit card. This will automatically report their credit card history on your credit report. No you will no be issued a credit card and I would suggest that there should be a great deal of trust between everyone involved in this type of transaction.
If you have any questions please post below or contact me.
Blessings,
Cindy aka Budget Momma
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