Your credit score is one of the
most valuable aspects of your finances. If your score is not good, follow the
tips below to raise your credit score:
1.
Keep credit card balances low: FICO scores, the
most common scoring method used by lenders, weigh 30% of your credit score on
existing amounts owed on credit accounts.
2.
Avoid impulsive retail decisions: Steer away
from running up your credit on random items that catch your eye. Many retailers
offer small discounts when you use a credit card, but the savings won’t be
worth it if your credit score is lowered.
3.
Look for errors on your report: Analyze your
annual credit report, and report any discrepancies to the credit-reporting
companies as soon as possible.
4.
Make timely payments: 35% of your FICO score is
determined by your payment history, so it is important to not miss payment
deadlines. Scheduling automatic payments before the creditor’s deadline can be
helpful to ensure the payment is made.
5.
Know ALL of your credit scores: Most creditors
use your FICO score to determine credit worthiness, but the three
credit-reporting bureaus (TransUnion, Equifax, and Experian) created
VantageScore to grade credit worthiness as well. Be aware of both of your
scores.
6.
Avoid going on an application spree: new credit
impacts your FICO score by 10%. If you don’t need the additional credit card,
don’t apply for one.
7.
Use credit to get good credit: During the
process of rebuilding your credit, it can be helpful to apply for a secured
credit card, which is a card that is secured with a deposit made by the
cardholder.
8.
Diversify your credit types: A good credit score
depends on installment credit lines (car loans, student loans, or mortgage) and
revolving credit lines (credit card or home equity line of credit). The balance
of credit types accounts for 10% of your FICO score, which is significant
enough to take note of.
9.
Enlist the help of a professional: Credit repair
professionals can assist in cleaning up your credit and challenge questionable
items presented to you by creditors and credit bureaus.
If you have any questions about
improving your credit score, let us know!
518 Arbor Hill Rd.
Kernersville, NC 27284
Ph: 336-996-3338
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).