Improve your FICO score
Out of the plethora of financial aspects, we lay our daily life upon, credit score plays a prominent role and is surely a standout. A good FICO score is something every one of us wishes for. Here, today, we will give you a glance at the factors that majorly drive your credit score towards the extinction or positively otherwise.
You might be startled after laying your eyes on these minimal things that make your score go nuts. With the very fundamental measures taken as mentioned below, you can ultimately expect an utmost good number on your scorecard. Now, if you are all set to deal with your FICO credit score, then, gear yourself and proceed in a stepwise attire as it is written below.
1. Where Are You?
Know what is your position. Stay aware of your credit score first, this primarily decides how you should work for the betterment of the score. Start everything with a copy of your credit report. You can know your Credit score through various mobile applications on both Android and Apple devices.
This can be done with no charges paid. Moreover, we suggest you go with the apps as there you can check your credit scores and alerts anytime when there is any activity on your credit file.
2. Find The Voids
Here, you must know how the score works. For this, you should check the skeletal body of the FICO score, these are the common logistics that judge your card’s stature. The total score is attained based on the categorized information which is clearly parted into both negative and positive ways as below.
1. Payment history: 35%.
2. Amounts owed: 30%.
3. Length of credit history: 15%.
4. New credit: 10%.
5. Types of credit used: 10%.
3. Get rid of the Unpaid-bills
As it was mentioned in the above point, the ‘Payment History’ and ‘Amounts Owed’ are the two major factors that occupy the staggering 65% of your conduct. Now, all it takes for a creditor is a quick glance at those details which can end up screwing your score. So, late payments are the worst things to see on a credit report.
Paying your bills on time accounts for around 30% of your FICO score, not just that, always avoid delaying the payments. Always keep an eye on the report and rectify the errors from time to time. Keep in mind, procrastination, in this case, might devastate your score in an absurd manner.
Meanwhile, if you yet don’t own a credit card, then, get one. One card is suggested, two is preferable. In general, we know it better than getting a credit card when you have bad credit is obviously not easy, for this, there are again a number of websites that will assist you to have a quick view based on your financial capabilities.
Secured or Unsecured?
There are two types of cards, one is secured, which many prefer. The other one is Unsecured. Other than the deposit factors, both work in a similar fashion. With a secured card you will need to pay a deposit equal to your credit limit.
For Example: If you get a secured credit card with a $1000 credit limit, you will be required to pay a refundable $1000 deposit to secure the loan. Post the 6-12 months of on-time payments, the credit card issuer may convert your account to an unsecured card and refund your deposit in-time.
4. Say ‘NO’ to the Collection Agencies that won’t remove your account
Keep in mind that you must stay away from those Agencies which follow a procedure of ‘pay for delete agreement’. If the creditor stands stubbornly on stating that he will update your status to ‘PAID’, instead of removing it, then it is better to keep him away. After all, having a bunch of collections on your report that shows a zero balance, is not at all helpful in dealing with your credit score.
If things with the agency don’t end well, we here have another step through which you can waive your transaction history from the credit report.
5. Clear the negative information on your report
You should be aware of the fact that the concerned credit bureau takes 30 days from the date they receive your dispute request to complete the investigation. If the creditor cannot verify the accuracy of the account, late payment, balance or whatever you disputed, then they will delete that item. This happens in between the closed walls, nothing messed up.
There are millions of people who got their maximum of 15 accounts removed within a month or two from the report just by disputing them. Now, this immensely helps in the improvement of your credit history. Sometimes the credit bureau won’t agree with your appeal, and that’s okay too if there’re one or two troubled accounts.
6. Remove the Credit Inquiries from your report.
Gone are those days when people used to send a pages-long good-will letter to the bureau, it doesn’t work that way anymore. Today, to ensure if the mistakes are corrected as quickly as possible, it’s important to contact both the credit reporting agency and the lender, bank or creditor that provided the information to the credit reporting agency. Both these parties are responsible for correcting inaccurate or incomplete information in your report under the Fair Credit Reporting Act.
7. Place yourself as an authorized user
This definitely is an add-on. As an authorized user you are now allowed to use as many credit cards as possible, there can be a possibility of you not being the actual owner of it, but, with a nod from the parent-owner, you can proceed as soon as you were included in his/her account. The credit card account o Authorized users can have their own card with their name on it to make purchases.
On the other hand, authorized users are liable if the account goes into default. Just as the parent-holders, the authorized users also reap the benefits of a positive account with good payment history. Most likely someone that is willing to add you on as an authorized will not want you to have a card, and that’s okay. You do not want any access to the credit at all, you’re simply using the authorized user status to add a positive account to your credit file which actually is quite affirming for the future if you may come up with your own credit card someday.
But, always stay firm on the stature of the account, step-in if only the account you are being added is in good standing. All the above factors must stay sound in the account you’re now authorized to. Remember, the standard of your account ages like wine, the longer it has been open the better. Your credit score will increase by several points once the creditor reports your new status on the account.
So, never turn down a financially responsible person when he wants to add you as an authorized user, because, it can only raise your credit score fast and better.
These are the complimentary tips that will assist you in catalyzing the credit score growth.
8. Don’t circle around ‘Opening and Closing’ multiple accounts. Apply for and open new cards only as needed. Having multiple accounts will only hammer you to carry a greater credit limit, which significantly devastates your credit score when you fail to maintain it.
9. It is suggested not to close the unused credit cards. Doing so may actually lower your score. This problem can be tackled by not opening too many accounts in the first place.
10. With the advent of limitless technology, cybercrime is leaving the credit card holders in hauls. Protect your credit information from fraud and identity theft.
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