I’ve had quite a few people ask me what they can do to help improve their credit score, so I figured I’d write this brief tutorial in hopes that it helps!
Anyways, as you know – Loans, house or car mortgages and credit cards are part of every individual’s life.
It may be easy to get them if you have a good credit score.
A credit score is a three-digit number that is arrived at after your credit report has been calculated. This is what lenders use to evaluate if you deserve to get a loan or mortgage. In addition to that, it will also determine the interest you will be charged on a loan. The better your credit score is the higher your chances of getting these things.
A good credit in the US Market ranges between six hundred and seven fifty points on average. Credit scores above seven hundred are usually considered unique and exemplary. They can attract very good offers on loans and mortgages. This is why it is important to learn how to improve your credit score, and 100 points is actually easier than you may think!
What impacts credit scores?
Quite a few things impact your score, but let’s look at the main ones you want to be focusing on:
- The total number and frequency of late payments (35%)
- Your bank account type, the number of bank accounts you have and how old the accounts are since you opened them (15%)
- The total debt you owe (30%)
- All your public records
What is not considered when calculating credit scores?
One’s race, religion or age is not taken into account by lenders when they are calculating your credit score as this is against the law in the US as it is seen as discrimination.
Furthermore, a place of residence should not be a determining factor for credit scores; neither should salary and employment history. However, some lenders may consider this so as to be sure that you can pay back as you earn a salary and have a job.
Tips on how to improve your credit score:
A good credit score in the US Market is not easy to attain if you do not pay attention to the crucial matters relating to credit. It takes a lot of dedication and sacrifice if you want lenders to consider you for loans and mortgages. It’s just like having a good reputation as people will tend to trust you more if they’re assured that you will not let them down. In other words, “well Hello Mister 750 Credit Score, come on in!”
- Pay your debts in time without delay as this may increase your credit score by many points. This will prove to your lenders that you are a responsible person able to fulfill your duties in terms of payments.
- Pay your bills on time, preferably pay them twice a month to give you an easy time when you want to lend money. It also ensures you have no pending debts hence a good credit score.
- Avoid borrowing a lot of money or taking loans and mortgages that you will have difficulty paying as it will give a bad reputation about you and making you get a poor credit score.
- Eliminate credit card balances before they accumulate and you are unable to clear them in time. This will stop you from achieving a good credit score.
- Check your credit card limits before using them to attain a good credit score. It may be embarrassing if you take more credit than you are permitted to, leading to more debt. It is also better to under-use your credit cards as it gives you room to be given more credit.
- Do not open too many credit cards that you do not need as this will tempt you to take more credit. Before you know it, you have debts everywhere and lenders are discouraged by such situations.
- Do not clear history of previously paid credit as this will give you a good credit score as lenders will see that you are capable of paying your credit in time like in the initial situations.
In summary, to have a good credit score in the US Market, just ensure that your credit records are clean and updated. Avoid debts, use your credit cards well AND pay your bills on time, every-time. In the end, you will really impress lenders who might just give you that loan that you urgently need.
Anyways now that you know that, the next step is to work towards IMPROVING your credit. For that, I suggest you check out the link below about how an ‘Average California Housewife’ improved her credit by almost 200 points in a couple months using her Smart Money Secret. (Yes, this really did work for her & it can for you too).