Because every credit report is different and there are many different credit scoring models available, there is no single solution when it comes to improving your credit score. In case you didn’t know FICO score’s can range from 300 to 850, here good credit starts at 699. Here are some steps that anyone can take to help improve their credit scores, however. Most people will find themselves having to start with a couple of the most important factors in credit scoring. Doing those two things, will ensure your scores are headed in the right direction. We can get give you a free consultation and break it down and explain it, we have over 10 years of experience and proven results to help you get your goals.
- Your payment history: Paying your bills on time, every time, is essential to having good credit scores. This is 35% of your total credit score, biggest impact!
- Your credit utilization: Keeping your credit card balances as low as possible is also essential. How your card balances compare with your credit limits is reflected in your utilization rate, or balance-to-limit ratio. 30% impact!
Review the Factors Impacting Your Credit Score
To better understand what’s affecting your credit, get copies of your credit reports from the three major credit bureaus. Your credit reports will show you key information including your account balances, payment history and credit inquiries. Get your credit score as well. When you order your credit score with a credit bureau, you will receive a list of the top factors that are currently impacting your score. Focusing on these “risk factors” will help you understand what changes you can make specific to your credit history in order to begin improving your credit score and your overall credit rating, and do so as quickly as possible.
Steps Everyone Can Take to Help Improve Their Credit Score
- Bring current any past-due accounts. If you have any accounts that are past due, such as collection accounts or charge-off accounts, bringing those accounts current is the first step to rehabilitating your credit scores. Paying off collections may not improve all your credit scores, but getting caught up with a late account will prevent any additional late payments from being recorded.
- Reduce balances on revolving accounts. Your credit utilization is calculated by taking the total of all your credit card balances and dividing it by the total of all your credit card limits. The lower your credit utilization rate, the better. Credit utilization above 30% can start to bring down your scores, and people with the best credit scores tend to keep their credit utilization below 10%. If possible, you should aim to pay your credit card balances off in full each month.
- Apply for credit only when necessary. Although inquiries have a minimal impact on credit scores, multiple applications for credit within a short period of time can cause lenders and credit scoring models to view you with more risk.
- Sign up for a secured credit card. This option makes people turn away as it involves an investment up front. Most secured credit cards will ask between $200-$500 to secure it, it might be painful for some people but this will get you going on the right track. It WILL be difficult to get a credit card with bad credit, and we need to create payment history this is going to be the way. Many secured credit cards offer small fees, but they can become traditional after a few on time payments. Feel free to check them out and see what works for you and your life style.
- Sign up for a credit monitoring service: Services like www.idenityIQ.com and other will have a “watch dog” service to keep an eye out for any fraud or identity theft that can set you back.
Check Your Credit Report Frequently
If you are trying to improve your credit score as quickly as possible, request a free copy of your credit report and review it carefully to ensure all information is accurate and up to date. You have to know what is in your credit report before you can determine what you need to do to make it better. If you plan to make a major purchase in the near future, order your credit report at least three to six months prior to applying for credit. Doing so will allow time for you to address any issues and for any changes to be reflected in the report prior to the application process. This can all be overwhelming and in reality now days we are busy with kids activates and everything going on at home, plus work. Lets Credit Services of America help you, we have different plans that can help get you back on track and into your goals! Please give us a call and we can set up a free consultation.