Credit Tips - Quick ways to improve your scores
Hey everyone, here's a short list of Credit Tips that will go a LONG way in helping you improve your scores. Over time, we will discuss each point in depth for a fuller understanding of why it's relavent. You can use this list as a quick reference guide until we get new content up.
Credit Tip #1: Want to improve your credit scores by 5-15 points right quick? Call 1-888-5OPTOUT or Click Here and remove yourself from the pre-approved credit card offers. You'll be viewed as a lower credit risk and consequently your scores will go up 5-15 points.
Credit Tip #2: Have you heard that you should stay under 50% of your credit limit on your credit cards? FICO scoring calculates the score based on 20% increments (IE.0-19%,20-39%.) Thus, if you are under 50% you are in the 40-69% bracket. The first major DECREASE in your score happens when you're credit usage enters this bracket. Therefore, ALWAYS stay under 39% of your total available credit limit! (See tip 8 for more info)
Credit Tip #3: Did you know that the TYPES of credit you have make a difference in your scores? One of the ways to improve your credit scores is to make sure at least three accounts in good standing appear on your credit report. The ideal mix appears to be a couple credit cards, and a mortgage or installment loan such as an installment loan on a car.
Credit Tip #4: Did you know that 78 percent of Credit Bureau reports are missing at least 1 positive trade line (IE. a Credit Card) and fully 1/3rd are missing a positive mortgage payment?
Verifying that you or your client's POSTIVE information is being accurately reported is as important as working on the negative!
Credit Tip#5: Did you know that some credit card companies (IE. Capital 1) are notorious for not reporting your credit limit? The bureaus will then use your high balance as your limit. This could result in your score taking a nice hit because you are "Maxed out." Verify all limits are reported!
Credit Tip#6: How is your credit score calculated?
1. Payment history: your track record. (35%)
2. Amounts that you owe: how much is too much? (30%)
3. Length of your credit history: how established is it? (15%)
4. New credit: are you taking on more debt? (10%)
5. Types of credit in use: is it a "healthy" mix? (10%).
Focus on what's most important when it comes time to improve it!
Credit Tip#7: FICO Scoring takes into account both the oldest credit account and the average age of all open accounts. Thus, Length of credit history is very important and it makes sense to keep accounts that are in good standing open. If you've already closed some old accounts, some creditors will permit you to re-open them under the same account number (which is important.) It's worth a shot!
Credit Tip#8: Some "experts" teach that having no credit cards is the way to be a good financial steward. Since most can't afford to pay cash for their home, cars, etc., this is TERRIBLE advice. To MAXIMIZE your credit score and GENUINELY be a good steward of your finances, use credit to your advantage. Make purchases that you would have paid cash for and then immediately pay them off online. Never carry a balance on your credit cards high than 39% of the overall card limit and ideally, never carry more than 19%. If you want to be "debt free," that's EXCELLENT - but don't unplug from the credit system entirely and kill your credit score. A good credit score means saving money and THAT is just smart finance!
If you want professional help getting your scores up, then simply click the image below and get started today!
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