When looking to increase your credit score, there are a few easy steps to take. Once you educate yourself about what makes a good credit score (or why you have a bad one), it will be easier to get on your way to working towards a respectable score. When following these four tips, one can see their credit score rise drastically.
Pay off debts
Often, a person will see their score suffer when they have old, unpaid debts that have not been resolved. The quickest way to fix this issue is to contact the creditors and ask to pay off the debt in return for a paid-in-full removal on the credit report. With this step, one can see their score risen significantly; however, when paying off old and delinquent debts, one must wait a few months to see the problem go away fully..
Avoid opening new cards or lines
When opening new credit lines, some banks fear that they person will take on more than they can handle. This is a problem that catches many by surprise. To avoid this problem, one should try to avoid opening cards while they are working on improving their score. Within a few months, a consumer should see their score rise, at minimum, a few points. Then, after fixing one’s score and profile, they can go on a spree and apply for cards.
Now, a person with no credit can have someone add their name to an existing credit card. When adding an authorized user, one will take some responsibility for that individual. However, the person being added will enjoy a massive jump in their credit score. That is if the person adding the user has a decent credit limit and low balance on the card. Remember, while this is a risky strategy, one can see their score rise into respectable territory quickly.
While some people have too much debt and credit, some do not have enough. To get a nice jump in a credit score, one can open a couple of credit cards or other loan accounts. This will allow a person to see a quick rise in their score even if they do not use the card or account. Remember, it is all about available credit and a consumer with more available credit will enjoy a higher credit score than his or her counterparts with little available credit.
With these four tips, one can see a drastic rise in their credit score. Remember, the sooner you get into good financial habits, the less you will have to worry about your credit. If you don’t know much about finances and that is why you have a bad credit score, it may be a good idea to see a financial adviser or do some research online so that you can have a clear understanding of the do’s and don’ts of money.
This article was written by Dixie, a freelance writer that writes for business, finance, women’s interests, and the home niches. She obtained her financial information from the professionals at the Legacy Lending Group, a financial institution that deals with fha mortgages in California. For more financial tips and ideas of how to build your credit, click here.