You may not need a credit history for now, perhaps you are not even thinking about how to improve your credit score. But at some point you will find a fantastic opportunity and you cannot access it because you do not have good credit.
Imagine, what happens if you need to rent a car or apply for a loan or credit card to finance your business?
You will find that your credit score is low and lenders will not allow you to borrow money or offer you lower terms and rates. You will miss out on the incredible opportunities that will help you grow your business. But don’t worry, Credit Services of America can help! Let us pave the path to improve your overall credit health.
Why is it important to increase your credit score? You may be surprised to learn that a good credit score can save hundreds or thousands of dollars on a car loan, or mortgage or even a credit card. For an entrepreneur, a good credit score can add up to tens of thousands of dollars in interest rate savings on long-term loans and credit card fees.
Here’s something else you need to consider: When applying for a business loan, your personal credit score can be just as important as your business credit score.
What if we told you that you can increase your personal credit score in 60 days?
Wouldn’t you want to take the necessary steps to make positive changes to your credit score?
To start, this table shows you the risk that lenders perceive according to different ranges of credit scores when they offer personal credit:
Score Credit Worthiness Market Interest %
300 – 599 Less than Poor No Credit/Sub Prime 17.99% – 29.99%
600 – 649 Poor to Fair Sub Prime 9.99% – 17.99%
650 – 699 Fair to Good Prime 4.99% – 9.99%
700 – 850 Good to Excellent Discounts 0.00% – 4.99%
(For illustration purposes only and will vary by banking institution)
The questions then arise:
Can I increase my credit score quickly?
How can I increase my credit score in 30 days?
Is it even possible to speed up the process?
If you have any of these questions, the following tips and techniques will help you improve your credit score and by as many points as possible.
Do you think that the only way to build credit history is by accessing credit?
Get a secured credit card!
A secured credit card is not the same as a prepaid debit card, nor is it the same as an unsecured card.
Secured vs Unsecured Cards: The Difference
A secured credit card is a credit card that you open with a bank or credit card provider, and to obtain it you need to leave a security deposit of about $ 200 (to be returned when you close the card). Annual percentage rates (APRs) on these credit cards range from 9.99% to 18.95%. This is an effective way to build credit especially if you have no credit or bad credit.
Don’t open too many lines of credit at once. You may be excited and want to get multiple credit cards. Do not do it! The credit bureaus will penalize your credit score if you apply for credit from multiple creditors in a short period of time. Get started with just a credit card.
Buy electronic devices in installments.
The next tip is to buy an electronic device (or something similar, like an appliance) in installments. We don’t recommend this if you already have a credit history, but it can be a great way to build credit if you don’t.
Is it the same to do this and get a credit card?
This does not mean that you should open a credit card at the place of purchase. What I recommend is to pay for electronic devices in installments. Buying them with a credit card can damage your credit if you exceed 30% of the credit limit (we will see more on this on a later tip). However, paying in installments helps you build credit. So make sure that you can pay in installments what you buy, and that the store where you make the purchase reports these payments to the credit agency.
Pay your bills on time!
This important tip will prevent your personal credit score from plummeting. Bottom line: make sure you make timely payments to your creditors.
Lenders know that you are creditworthy and trustworthy when you pay your debts on time. They don’t want to see notes on your credit report stating that you don’t pay your credit card or loans and other financial obligations. Consider setting up automatic payments or receiving alerts on your smartphone to always pay your bills on time.
Consolidate your credit card debt through an installment loan
If you have already exceeded the 30% limit on your credit cards, you need to evaluate the options you have to consolidate your credit card debt into a single installment loan. Finding lenders who are willing to refinance your credit card debt is not as easy as it sounds, but here are some options where you can apply; with credit unions being the best option.
Request your credit report regularly
By having your credit report in your hands, you can detect inaccurate information and take steps to correct those discrepancies. Annualcreditreport.com can help.
Keep older, established or business credit lines open for as long as possible. Credit bureaus give creditors a higher score for having lines of credit available over a long period of time. This shows them that you are capable of maintaining a long-lasting relationship with a creditor, instead of accumulating debt by being forced to close accounts with your creditors. Credit bureaus use credit lines to calculate a borrower’s credit score by reviewing credit limits, length of time credit was extended, and payment history. They can also see if you make timely payments on your line of credit.
Never exceed 10% of your credit capacity
As a general rule, you should never exceed 10% of your credit card limit to keep a healthy credit score. The moment you start to exceed this limit, having a credit card will actually affect your credit rather than help you build it. When you exceed 10%, it is a warning sign to the credit bureaus that you do not have a healthy credit utilization ratio (the debt incurred against credit limits).
Limit the number of credit applications you make
Every time you fill out a credit application, creditors ask the credit bureaus for a thorough consultation or verification, commonly known as a credit hard inquiry. These credit checks affect your credit score and stay on your report for two years. On average, each inquiry can lower your credit score by an average of 2 – 5 points or more. Therefore, too many inquiries cause your credit score to plummet so you could pay higher interest rates when applying for loans and credit cards.
Do not close credit cards that you have paid in full
Don’t close a credit card account simply because you don’t use the card. Even if you’re not using credit on the unused cards, the available credit counts towards reducing your credit utilization rate mentioned in a previous tip. So, as a strategy to improve your credit score, keep those accounts open!
By far the best tip we can offer: Get professional help!
At Credit Services of America we have helped thousands of customers repair their credit, we have also help boost their overall credit file through the many tools we offer and with the help of our very experienced Credit Consultants. Give us a try, call us to set up a FREE Credit Consultation and explore a new world of credit possibilities.
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.