With all the different kinds of information that credit scoring models incorporate, numerous tactics for improving scores are available. However, any action to improve a score must be taken judiciously; some actions aimed at improving your score may actually make it worse.
Many individuals reap significant benefits by properly employing these simple FICO score improvement techniques:
- Make payments on time, especially to installment & revolving accounts, as these report to bureaus.
- Do not apply for any new credit cards or loans.
- Pay credit cards balances down to 30% of your credit limit or less.
- Make sure your credit card company reports a limit.
- Keep 3-5 open and active accounts in good standing on your credit report.
- Review your credit report every year.
COMMON CREDIT MYTHS
- Paying off your auto, student or mortgage loans will help improve your score.
- Paying off your major credit cards and leaving small store cards maxed.
- Paying a large up-front credit repair fee will get you better service.
- After 7 years, a negative item on your report will disappear and will no longer lower score.
- Having a 3rd party, such as a consumer credit counseling firm manage your finances.
- For corrections, the burden of proof lies with the consumer.
- My divorce decree states that my spouse is responsible for the debt, so any future negative items will not affect my score.
- Your collection was sold, so the original one will be erased.
- You need to contact your creditors rather than the bureaus every time you think there is a mistake.
- Paying off your collections will help your credit score.
- Once you pay a collection, charge-off, judgment, or tax lien it no longer impacts your score.
- Using your credit cards a lot will increase your history & raise your score.
Thank you to Teila Robnett from Colorado Mortgage Alliance for this information.
Office - 303-680-3094
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