4 Steps
to Building
Great Credit
Quick Tips
to help
your FICO score
Things that
may help you
10 Commonly Missed
Tax Deductions
5 Quick Tips On
How to boost your FICO score:
After you become debt free your debt to income ratio will be in much better condition than before. This will give banks and financial institutions a new opportunity to lend to you – for the purchase of a home, auto, credit lines and other things you may want to pay for over time. Then the question becomes: at what interest rate? That will depend on your FICO rating.
Lenders use credit scoring to determine if people get approved for credit, how quickly they get approved for credit, the terms they get approved for and what kind of credit limits they get. It affects everything.
Despite the importance of FICO scores, few people pay attention: 75% of Americans don't know their credit score, and nearly 20 percent have never seen their credit report.
Here are a few simple actions can help hike your FICO score, the most common credit measure, within a couple of months. An improved score can mean lower interest rates and better deals on everything from credit cards to a new car, insurance or a home.
1. Check your score the right way to avoid a credit ding
Be wary of taking advantage of Web sites offering free or easy credit reports. Sometimes, requesting your credit report from these companies leads to what's called a "hard inquiry" into your credit -- essentially the FICO system thinks you've asked to borrow money and a creditor is checking your credit. That can lower your score.
2. Take charge of your credit applications
When you fill out a credit application, the car dealer or other vendor may send it out to numerous banks or other financing firms that then check your credit.
While credit checks requested by a bank, credit union or dedicated auto-financing company within a 14-day window will total just one credit ding, other types of companies won't fall into that category. That means a general finance company checking your credit would add a separate credit check to your report, Snyder said.
"You have to take control and limit" how many credit checks are run through your account, he said. When buying a new car a few days ago, he told the finance department his scores "are between 760 and 800, and she said with those scores I can take you to Huntington Bank. I said great, I give you permission to shop Huntington Bank," Snyder said.
3. Pay down debt
Keeping individual card balances to under 30 percent of the card limits will help improve your score.
4. Don't assume timely payments are the only score driver
People often pay bills by credit card to stay current. But, it's not uncommon for someone to have all their bills paid on time but their credit score is like 580 because they're maxxed out on so many cards.
5. Put a rush on fixes
Check your report for errors, and once you've fixed any problems, ask the credit agencies to update your report quickly.
The calculation used to figure a FICO score is complex, with a number of variables. If you are consistent in doing your part, a great FICO score is attainable much quicker than you may think.
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