If you are like most people and don’t know your credit score, there is a solution. Discover Card provides free FICO scores to its cardholders; which 90% of businesses use for lending decisions. Capital One offers Vantage Scores that have similarities but are not the same as a FICO Score, while other sites offer similar services with access to both types of scoring products depending on what type you qualify for through their site.
The Vantage Score was developed by the same people who came up with FICO, and it is based on information from three major credit reporting bureaus: Experian, TransUnion, and Equifax. The difference between these two scores is small enough that you can have one without worrying about affecting your other score, but don’t try to keep both.
The first time you get your score, it might not be as high as you expected.
Follow this top ways to Improve your credit score:
1. Review Your Credit Report
If you want to fix your credit, there’s one easy and free way; get a copy of all three annual reports. One is not better than the other, so it doesn’t matter which ones you choose. When reviewing each report closely for discrepancies or errors with the information that appears on them (such as incorrect addresses), don’t hesitate to dispute any mistakes that were made.
26% of people have at least one potentially material error in their credit files. These errors can be as simple as a misspelled name or address, or more costly mistakes like an account that is reported late or delinquent when it should not be, debts listed twice on your report, and closed accounts still showing up open; even if the balance has been paid off. All these things make you look less favorable for loans and other financial applications.
Notifying the credit reporting agency of wrong or outdated information will improve your credit score as soon as the false information is removed. 20% of consumers who identified mistakes saw their credit scores increase when they notified these agencies and corrected any errors.
2. Set Up Payment Reminders
Keeping track of your bills is crucial to achieving a higher credit score. If you want quick and dramatic success, make sure to write down the deadlines for each bill in an organized planner or calendar with reminders set up online so that they will be constantly on hand. This can raise your score within months.
3. Pay More Than Once in a Billing Cycle
The sooner you pay your bills, the better. Paying debts every two weeks rather than once a month lowers credit utilization and improves your score.
4. Contact Your Creditors
Late payments can wreck your credit score and leave you with a huge bill. Set up an emergency payment plan that includes paying off the debt, then put money every month into savings to pay for future bills on time.
5. Fix Credit Report Errors
Sometimes the bank will make mistakes in reporting your credit score, which can hurt you. Although it may not seem like a big deal, reviewing your credit report periodically is important to ensure that any errors are corrected and that no fraudulent activity has gone unnoticed.
Getting a free credit report is easy and only takes a few minutes. All you have to do is visit their website, request the reports once every week for four years through April 2021 in order not to miss any deadlines or important information!
6. Apply for New Credit Sparingly
Borrowers may want to know that while getting a credit card can increase the total limit, their score might suffer if they open several new accounts in a short period.
7. Have a Variety of Credit Accounts
Borrowing money is never a good thing, but it can be helpful to have multiple credit accounts. People might think about borrowing for things like car loans or buying houses, and whether that’s something they should do responsibly. The truth is having different types of debts will help your score in the long run by showing that you’re responsible with managing debts. So if you’ve been thinking about getting another kind of loan then go ahead.
Loans that you repay in full can remain on your credit report for up to ten years, giving you more choices and a higher score.
8. Don’t Close Unused Credit Card Accounts
Longer credit histories are better. If you must close accounts, do so for the newer ones first and be sure to keep your oldest account open at all times.
9. Be Careful Paying Off Old Debts
If you make a payment on the debt, it reactivates and lowers your credit score. This often happens when collection agencies are involved because they need to show proof that their client has been making payments to collect more money and meet targets or else they may get fired from their company.
10. Pay Down “Maxed Out” Cards First
If you have multiple credit cards and the amount owed on one or more is close to your limit, you should pay off whichever card has the highest balance first so as not to max out.
11. Diversify Your Accounts
Your credit score is a 10% sum of your mortgage, auto loans, student loans, and card payments. Adding another element to this mix can help you get an even higher rating as long as they are paid on time.
12. Quick Loan Shopping
If your credit score is low and you can’t find any other way to improve it, consider taking a “quick loan”. These loans are typically for small amounts, ranging between $250-$1,000. If the repayment history gets reported to the agencies this could help raise your credit score. This should be done as a last resort only.
13. See If You Qualify for a 0% Interest Card
A lot of new and interesting cards are coming out with 0% interest on balances. There’s a catch, though. If you want to transfer the balance, there might be an early enrollment fee attached. Sometimes these offers last only 12-18 months or have higher rates after your introductory period is over. You’ll want to make sure that all factors such as annual fees and late payments fit into your budget before committing any time frame for this card offer.
14. Consider a Debt Consolidation Plan
A debt consolidation program can help a person who has accumulated credit card or student loan debts. Though it may cause you to temporarily lose your good credit score, once the on-time payments are made and paid off, their rating will improve again. They also get rid of the debt that got you into trouble in the first place.
15. Pay Attention to Credit Utilization
If your credit limit is $5,000 and you have a good credit utilization rate of 30% or less, then this means your balance should never exceed more than $1,500. When it comes to improving one’s score the most overlooked aspect for many people is their revolving credit usage ratio (how much they are using relative to what they can use). One way in which you may be able to improve this metric would be by paying off debt on time each month because if someone does not follow up with making payments after taking out loans there will always exist the possibility of defaulting on these agreements.
What’s next?
Sign up to get your free credit score and report from the credit repair company. Information is updated weekly, and the factors affecting your score are broken out to make them easier to understand.
Learn how you can manage your credit with creditrepairease.com.
Resources:
What are some tips for improving your credit score?
5 Steps to Fix Your Credit Score
