If you want to improve your credit score, you’re not alone. Everybody wants to improve their credit, and with good reason. However, for those with bad or average credit, it’s not as simple as getting a better deal on a car loan. It’s about getting creditors off their backs, being able to apply for a credit card without facing predatory fees and being able to look for a new apartment without sweating a credit check. Some people take these things for granted, but many do not.
The good news is that no matter where your credit score sits today, you can make it better. In fact, the worse your credit score is, the more it can be improved. Here are some tips to get your score moving in the right direction.
Understand Your Credit Score
The most important aspect of improving your credit score is understanding how it works. Your credit score is merely a snapshot of how you’re managing credit at a single point in time. It can, and likely will, change from month to month, if not more frequently. There are many different credit scoring models, most of which borrow from the FICO model. The FICO model is comprised of five major factors:
– Your payment history (35%)
– Your ratio of used credit to your credit limits (30%)
– The age of your credit accounts (15%)
– Number of credit applications in the past two years (10%)
– Your ability to manage different lines of credit (10%)
The bottom three criteria make up 35 percent of your credit score, but these areas are the least important. You can’t do much about your mix of credit accounts at the moment, nor can you go back and erase credit applications. And you certainly can’t add to the age of your accounts. Though you can make your scores in these categories worse, you can’t make them better on your own. Ignore these for now and focus on what you can change – the top two categories, which account for two-thirds of your credit score.
Improving Your Credit Ratio
The easiest way to improve your credit ratio is to simply not use your cards or to use them as little as possible. If you must use a credit card, pay at least the amount you’ve charged each month at the end of the month to avoid interest charges. Refrain from applying for new credit or requesting a credit limit increase on existing accounts, as this counts as an application on your credit report and will hurt your score.
Many people apply for a “balance transfer” card to increase their credit score. The idea is that your credit ratio will improve and you’ll be able to pay off your current debts at a better interest rate. The problem is, now that you have additional credit, you’re very likely to use that credit, leaving you with a bigger balance, not to mention a damaged credit score. The same is true for debt consolidation loans. While these offers sound appealing on the surface, they’re more likely to do harm than good.
Improving your credit score doesn’t happen overnight; it can take a lot of work to see changes. The services provided by CreditRepair.com may help you to increase your credit score by confronting unfairly reported, inaccurate, and unsubstantiated items on your credit reports. The experts at CreditRepair.com can rehabilitate and improve your credit score while you go on with your life and rest easy knowing that your credit score, and quality of life, is on the rise.