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The vast majority of people don't realize how the credit score system works - and contrary to popular belief, it can be easy and fast to raise your score! |
Attaining a Credit Free Score
If your credit free score is under 620 you are likely finding it impossible to get a loan – or an apartment or lease a car or any manner of other credit related problems. The biggest problem that you are likely facing is that if you have applied for any of those things, you are probably applying for them out of necessity rather than luxury. It may seem hopeless but there are ways that you can boost your credit score and make things easier for yourself in the future. While there is no such thing as a quick fix when it comes to credit score and you need to have your finances in order first, here are four things you can do to increase you credit higher and faster.
The Older the Better
If you have more than one credit card – which you likely do – make sure you keep using your old cards as well. The best way to do this is make a small purchase with them every few weeks and pay off the balance in full. This is a great way to go about boosting your credit rating as your credit history looks better the longer it’s been active.
The Pros Aren’t Always Right
If you’re trying to improve your credit rating, instead of paying off the highest interest-rate card first, start with the card that’s closest to its credit limit. This is the better strategy for improving your credit free score because this is what lenders are looking at. The closer you are to your credit limit, the worse it looks for you. A high interest credit card will take longer to pay off, but the better plan is to pay off the one that has the most left to pay off so you can get your credit score higher.
Know Your Limit
This is true in all aspects of life, but especially true when trying to get a better credit score. If your credit limit is higher than what the lender is showing, it’s going to have a negative impact on your credit rating. If this is the case, you can ask the company that issued the credit card to update the information and most will do it right away.
There are some credit card companies that don’t report credit limits to the credit bureau which can pose a bit of a problem. What the credit bureau does in cases like this is sort of assume your credit limit is the highest amount you’ve charged. If your limit is actually higher than that and you go over that on a regular basis, it’s going to look to the credit bureau like you’re always maxing out your credit card.
Don’t Over Use Your Card – Even If You Always Pay Up
If you try to limit your spending to less than thirty per cent of your credit limit, you should be able to raise your credit rating. The problem is, even if you pay off that high credit card bill every month, that isn’t what’s reported to the credit bureau by the credit card company. The credit card company just reports the balance reported on your credit card from the month before. Racking up big bills and paying them off doesn’t help your credit rating in the least. Keep your credit free score as high as you can as it will be good in the long run.
CLICK HERE to find out your Credit Free Score