|
5 METHODS TO INCREASE YOUR CREDIT SCORE
It is not an astronomical task to raise
your credit score. It is well known that
people with good credit scores will get
loans at much lower rates for credit
cards, car loans and mortgages. If the
credit score of yours fall below 620,
then getting credit cards and loans with
just reasonable terms also is difficult.
There are over thirty million people
with credit scores below 620 in the U.S.
alone. Therefore, this article will give
you five easy tips to raise your credit
score:
Get a photo copy of the credit report
Obtaining and looking into your credit
report is a good idea as the errors, if
any, can be spotted and removed
resulting in the increase of your credit
score. Contact the credit bureau
immediately in case you have found any
inaccurate information.
The credit reports should be obtained
from 3 major bureaus: Equifax, Trade
Union and Experian. Each service has a
different method to calculate your
credit scores.
Make your payments On Time
Your history of payment adds up thirty
five percent to your credit score. Your
more recent transactions will add or
subtract more points from your credit
score than the one which happened 5
years ago.
Missing your payment for a month will
knock off fifty to hundred points from
your credit score.
This way is one of the best methods to
begin to rebuild your credit score.
Pay Down your outstanding Debt
The credit card issuer’s will report
your outstanding balances to the credit
bureaus once every month. Your credit
score will not shoot up if you pay your
entire debt at once. But it will
definitely decrease if you don’t pay
your monthly instalment. Therefore, your
credit card score will not be affected
whether you carry your balance from
month to month as long as you are paying
your monthly instalments.
Most people are not aware of the fact
that the bureaus do not distinguish
between people who do not carry any
balance on their credit cards with those
who do. Therefore, by you can raise your
credit score just by paying your credit
card bills each month.
Lenders like it when they see a huge gap
between your debt on the cards and your
credit limit. Therefore, the lesser your
debt is the higher your credit score
will go.
Do not terminate those Old Accounts
Previously, people closed their old
accounts. However, in today’s regime
that method will actually decrease your
score.
The reason behind it is this, by closing
of the old paid off accounts and keeping
only the new ones your balances will
appear huge during the calculation of
your credit score. By just keeping those
old accounts active your credit score
will rise.
Stay Away from Bankruptcy
Bankruptcy is the worst thing that can
happen to your credit score. It will
destroy your credit score by making it
lesser by two hundred points. It is
generally very difficult to get back a
good credit score after bankruptcy.
|
