Credit score is like health, most
people don't think about it until it becomes a problem. Just as the
current state of your health mirrors the health habits you have
followed over a longer period of time, so your credit score reflects
your credit history.
It means that building a high credit score takes time (although there
are some shortcuts) and maintaining it is a continuous process. In this
article, you'll find 5 ways to increase credit score and ensure you get
good interest rates whenever you need credit.
Credit score, or FICO score (the most commonly used credit score,
created by the Fair Isaac Corp.), is a number ranging from 300 to 850
which is calculated with a mathematical model, using the information in
your credit report.
The number shows the lender the likelihood of you paying back the loan
on time. The higher the score, the less risky it is for the lender to
give you a loan and the better interest rate you are offered.
If your credit score is 700 and above, you’re likely to get
the best interest rates available. A bad credit score not only may cost
you thousands of dollars in high interest rates – if your
credit score is in a really bad shape (e.g. below 500), you may not
qualify for a loan at all.
To sum up, in order to get credit and good interest rates, you need to
have a high credit score.
** 5 important tips on how to increase credit score and keep it high **
1. Pay your bills on time. That’s the first advice
you’ll get when you’re looking for ways to increase
credit score. This tip seems really simple and obvious, but still many
people underestimate its importance.
The more recent your payment problems are, the worse. So, in order to
increase your credit score, start paying bills on time right now, and
your score may already be higher after a month.
2. Keep your credit card balances low. High outstanding debt may reduce
your score. If you max out your credit cards, your score may be lowered
even by 60 points.
Instead of having one card close to being maxed out, transfer the
balance from this card to a few other cards, so you can keep your
credit card balances at or below 25% of your credit limits. Paying off
debt is even a better way to increase credit score, so if possible, do
this, but…
3. Don’t close paid-off accounts! Closing old accounts
reduces your total available credit, which in turn changes your
utilization ratio (the amount of your total debt divided by your total
available credit).
This may lower your score. Shutting down your oldest credit accounts
shortens your credit history, which also makes you seem less credit
worthy, therefore your score can drop.
4. Get a small loan. In order to qualify for a bigger loan (e.g.
mortgage loan) in the future, you have to establish a credit history.
If you have little or no credit score, and you prefer to avoid credit
cards, acquiring debt is a quick way to start raising your credit score.
After all – if you have no debt, how can you show the
potential lenders that you are a good borrower, who pays the bills on
time? Of course, you have to use this method of building credit score
wisely – excessive debt load and a bunch of small loans may
backfire.
5. Do your interest shopping within two-week periods. Each time you
apply for a loan and the lender accesses your credit report, your
credit score is lowered by 3 points.When trying to find the best
interest rate for a loan, keep your loan processes within a focused
period of time.This way, all your credit report inquiries are
accumulated and will be treated as one single request, when your credit
score is calculated.
Fast and Easy -
Instant Credit Cards ! Bad Credit-OK !!!Good or Bad
Credit History? Student? -
Get Low APR and Instant Online Approval.
Apply for Instant Approval Credit Cards at
Instant Credit Click Here!!- Featuring Low Interest Rate and 0% apr Credit Cards!
gen0cyber
![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small}
chipper