1. Find Out When Your Issuer Reports Payment History:
Call your credit card issuer and ask when your balance gets reported to the credit bureaus. That day is often the closing date (or the last day of the billing cycle) on your account. Note that this is different from the “due date” on your statement.
There is something called a “credit utilization ratio.” It is the amount of credit you’ve used compared to the amount of credit you have available. You have a ratio for your overall credit card use as well as for each credit card.
It’s best to have a ratio — overall and on individual cards — of less than 30%. But here’s an insider tip: To boost your score more quickly, keep your credit utilization ratio under 10%. Remember the FICO score also looks at each card’s ratio
But here’s the problem: Even if you pay your balance off every month (and you should), if your payment is received after the reporting date, your reported balance could be high — and that negatively impacts your score because your ratio appears inflated.
So pay your bill just before the closing date. That way, your reported balance will be low or even zero. The FICO method will then use the lower balance to calculate your score. This lowers your utilization ratio and boosts your score.
2. Pay Down Debt Strategically:
Pay Twice a Month!
Call and make sure to get the closing date. Make a payment two weeks before the closing date and then make another payment (like 3 days) just before the closing date. This, of course, assumes you have the money to pay off your big expense by the end of the month.
3. Raise Your Credit Limits:
If you tend to have problems with overspending or have been late skip this step.
The goal is to raise your credit limit on one or more cards so that your utilization ratio goes down. But again, this only works out in your favor if you don’t feel compelled to use the newly available credit.
That said, as long as you’ve been a great customer and your score is reasonably healthy, this is a good strategy to try.
All you have to do is call your credit card company and ask for an increase to your credit limit. Have an amount in mind before you call. Make that amount a little higher than what you want in case they feel the need to negotiate.
4. Mix It Up:
Your credit mix is only 10% of your FICO score, but sometimes that little bit can bump you up from good credit to excellent credit. Best items to have is 3-4 revolving accounts and 2-3 instalment loans. For example, 4 credit cards and an auto loan, or even a loan that reports to the bureaus. This is basically so that lenders can see how you handle credit.
5. Categories that make up your credit score:
• Payment History 35%
• Amounts Owed 30%
• Length of Credit History 15%
• New Credit 10%
• Credit Mix 10%
When you want to boost your credit score, there are two basic rules you must follow:
First, keep your credit card balances low.
Second, pay your bills on time (and in full). Do these two things and then toss in one or more of the strategies above to give your score a kickstart.
And remember — you do not have to carry a balance to build a good score.
A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link creditservicesofamerica.com to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS!
*Individual results may vary. Please call for more details and to discuss your own individual situation.