How can you raise your credit score? Consider these tips.
There are a lot of benefits associated with having a good credit score. It can help you get low interest rates on credit cards and loans, excellent credit card deals and higher credit card limits, lower financing rates when buying a new car, better car insurance rates and easy vacation and home rental reservations as well.
Considering the many benefits that come with it, most people are aiming to get a credit score between 720 and 850. Unfortunately, the national average credit score runs a little low at 681, according to Fair Isaac Corporation (FICO), a company that developed the FICO score using the information provided by the three major credit reporting agencies (Equifax, Experian and TransUnion).
How to Get a Healthy Credit Score
If you need some help in improving your credit score, here are some tips that can help you achieve your goal.
Check your credit score. According to the data collected by StatisticsBrain.com, only 39% of Americans have obtained a copy of their credit report while only 35% checked their credit within the past 12 months. Unfortunately, more than 42 million people in the US have errors on their credit reports. To make sure everything is in order, you need to check your credit report on a regular basis. If you find any errors, you can dispute them online through Equifax, Experian or TransUnion.
Get a credit card. Having one or two credit cards can do wonders for your credit score – if you know how to manage it well. If your credit is so bad that you cannot get a traditional credit card, see if you can get a secured credit card instead. Almost everyone can get one of these since it requires you to make a deposit but make sure you apply for a card that reports to all the three credit bureaus mentioned earlier.
Be responsible when using your card. Don’t use your credit card to pay for all of your expenses. Keep your credit utilization ratio at 30% or even less. For best results, try to use your credit card for no more than 10% of your purchases to get the maximum points for your FICO score. Pay your bills on time and make sure you don’t go over your credit limit to raise your credit score.
Keep your cards active. Don’t close any cards since this move can lower your credit utilization score which may ultimately affect your credit score.
Master the art of negotiation. If you have stopped paying your credit card bills due to unemployment, ask your creditor if they can erase your debt when you pay the remaining balance and report the account as “paid as agreed”.
You may need to exert some effort and make some wise decisions to raise your credit score but you can be sure that all of these would work to your advantage.