Want a higher credit score? Soon your cash could help

5 Ways to Increase Your FICO Score

Want a higher credit score? Soon your cash could help

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Improving your credit can often feel navigating through a jungle. It’s disorienting. To make matters worse, most schools don’t teach students about credit. The good news is that with a little work, you can master credit and begin to increase your FICO score.

Before we dive in, let’s quickly explore why you should even care about improving your FICO credit score.

Having Excellent Credit Can Save You Thousands

During your life you will ly need to borrow money at some point. For many people it’s to be able to go to school. For others it’s an auto loan to buy a car or a mortgage to purchase a home.

Regardless of why you need to borrow money, your credit score will affect your ability to borrow money and the interest rates you are offered.

In fact, the difference between a top credit score and a less than stellar one can mean paying over $100,000 more in interest over the duration of a $350,000 mortgage. That’s a lot of money to pay simply because you didn’t put in the work to improve your credit score.

Aside from lowering your interest rates, having solid credit will give you access to the cash back credit cards with the best perks. Some employers even check credit records as they move candidates through the hiring process, so it could even affect your career. In some states, your credit can also affect your auto insurance rates.

With that, here’s what you can do to get your FICO credit score moving in the right direction.

1. Check Your Credit Reports For Accuracy

Trying to improve your credit without checking your credit report is embarking on a road trip without a GPS. In the case of credit scores, your credit report is your GPS.

Two free and easy ways to check your credit report are AnnualCreditReport.com and CreditKarma.com. Your official credit report won’t list your credit score, so don’t be surprised if you can’t find it. CreditKarma gives you an estimated score, which should be pretty accurate. But it’s not a score the FICO formula. Fortunately, there are ways to get your FICO score for free.

Once you have your credit reports from the three major bureaus it’s imperative that you check them for accuracy. A study by the FTC found that “one in four consumers identified errors on their credit reports that might affect their credit scores.” So it’s clear that reporting mistakes are common.

If you find an error, you need to contact the bureau(s) directly to correct the error and verify that all the information is correct. This alone could quickly improve your credit.

2. Make Sure You Always Pay Your Credit Accounts on Time

Your payment history is the most important factor in your credit score calculation. Everyone knows that not paying their credit accounts will hurt their score, but you might not realize that a late payment will stay on your report for up to seven years.

If you regularly make on-time payments it gives prospective lenders comfort that you are responsible with your money. On the other hand, if you have a history of being behind on payments, it’s critical that you change this pattern as soon as possible.

Even if you are unable to pay your cards off in full on a monthly basis, which is widely considered the best approach, making the minimum payment regularly will keep your accounts in good standing.

If you have trouble remembering to make the minimum payments, I recommend that you set automatic payments up within each credit account so that you won’t miss any payments. You’ll just have to make sure you always have enough money in your bank account because most lenders (and your bank) will charge you a fee for insufficient funds if you don’t.

3. Lower Your Credit Utilization

The second most important factor that goes into calculating your credit is the amount of credit that you use as a percentage of the total credit available to you.

In other words, if you have a credit card with a $2,000 limit and your card balance is $1,000, you are utilizing 50% of your credit.

In general, the lower your credit utilization is, the more attractive you are to lenders because it signals that you aren’t over-extended and are more ly to use credit responsibly.

If you search around the internet you’ll see a number of different guidelines in terms of which utilization percentage is the best. Some people will encourage you to remain below 35%, while others will recommend below 25%.

However, the one thing that is universally agreed upon is that a lower utilization is better. According to a recent report from FICO, those with a FICO 8 score of 785 or higher had, on average, a credit utilization rate of 7%.

Kacey Weiniger, a recent graduate from the University of Southern California who is working to build credit, had to lower her utilization well below 30% to see an impact. Weiniger adds, “I didn’t notice a boost to my credit score until I lowered my utilization below 10%.”

Another way to quickly lower your utilization is to ask for a credit limit increase. The chance of your request being approved is low if you don’t have a solid track record of payment and a decent credit score, but it doesn’t hurt to ask. You’ll also want to keep in mind that more credit can be dangerous if you have a propensity for spending.

4. Take Care of Credit Accounts That Have Been Sent to Collections

Having unpaid accounts sent to collections can wreak havoc on your credit score. Since your credit can impact your financial health, it’s important to sort out any issues you have with lenders.

Discussing how to handle accounts that have been sent to collections is a topic that requires a lot more time and attention than a couple of paragraphs. For that reason, I will leave you with a link to a guide on Reddit that is very comprehensive.

The biggest takeaway is to make sure you request a debt verification letter before you pay a lender who claims you owe them money. It’s fairly normal for banks to sell your loans to other banks and lenders. If you pay without requesting verification, you run the risk of paying the wrong lender.

5. Optimize Your Account Age, Credit Mix And Credit Inquiries

The remaining components of the credit score algorithm include the average age of your credit accounts, the variety of accounts that you have, and the number of new inquiries into your credit.

As the average age of your accounts increases, you’ll receive a bump to your credit score. This is because having more established accounts shows that you’ve maintained credit for a longer period and are therefore a better borrower.

This doesn’t mean that you should close your newest cards, or refuse to ever open another credit account, but you should be conscious of how many new accounts you have. This is especially important if you have a large upcoming transaction purchasing a home and need to have your score as high as possible.

My twin brother, Francisco Maldonado, who is also my co-founder at The Finance Twins, and I signed up for credit cards on our 18th birthday. We didn’t realize the impact that this decision would have on our credit, but we are now reaping the benefits of having a long credit history.

Our oldest cards have no annual fee and we use them enough to keep them active (banks will sometimes close inactive accounts). This allows us to raise the average age of our accounts, and this, coupled with always making on time payments has allowed us to have credit scores around 800, which is excellent.

Having a variety of different types of accounts is also seen as favorable. For that reason, it could make sense to submit utility payments to a credit bureau if you only have a “thin” credit record, with few accounts. Unfortunately, Experian is currently the only credit reporting bureau that allows you to add some utility payments to your report.

If you have a credit card, a student loan, or a car loan on your report already, it might not be necessary to add utilities. If your credit is in rough shape, however, adding additional on-time payments to your history may help you.

Finally, the number of times your credit is checked by lenders can impact your credit. Admittedly, the effect of an extra inquiry on a report may be as small as five points. Still, that could make a meaningful difference if you’re close to the next tier of scores and are planning to purchase a home or car in the near future.

Above 760, the Benefits of a Higher Score Are Diminishing

As you read this guide and begin to think about the changes you want to make to improve your credit, it’s important to remember that it can take time.

Lowering your utilization drastically can quickly improve your credit, but don’t get discouraged if you don’t see a change overnight. It’s also important to remember that you don’t need to have a perfect credit score of 850 in order to receive the perks of a high score. Many lenders consider a score of 760 to be perfect enough—meaning having a perfect 850 won’t get you a better rate.

Finally, if you don’t have credit and have been rejected for new cards, it can seem impossible to start building credit. If that’s the case for you, you’ll want to look into applying for a secured card. This is an entry level card that requires a deposit as collateral.

Источник: https://www.forbes.com/advisor/personal-finance/5-ways-to-increase-your-fico-score/

5 Sneaky Ways to Improve Your Credit Score

Want a higher credit score? Soon your cash could help

There are certain times when it pays to have the highest credit score possible. Maybe you’re about to refinance your mortgage. Or maybe you’re recovering from a bad credit history and you want to get approved for a credit card.

It’s always good to have a healthy score, of course.

But if you’re in a place where you really need to up that score as soon as possible, there are a few under-the-radar ways to speed up the process.

How to Raise Your Credit Score Fast

How long will it take to increase your credit score? It won’t happen instantly, but if you follow the steps in this article your credit score will begin to go up within a couple of months. Let’s get started.

1. Find Out When Your Issuer Reports Payment History

Call your credit card issuer and ask when your balance gets reported to the credit bureaus. That day is often the closing date (or the last day of the billing cycle) on your account. Note that this is different from the “due date” on your statement.

There’s something called a “credit utilization ratio.” It’s the amount of credit you’ve used compared to the amount of credit you have available. You have a ratio for your overall credit card use as well as for each credit card.

It’s best to have a ratio — overall and on individual cards — of less than 30%. But here’s an insider tip: To boost your score more quickly, keep your credit utilization ratio under 10%.

Here’s an example of how the utilization ratio is calculated:

Let’s say you have two credit cards. Card A has a $6,000 credit limit and a $2,500 balance. Card B has a $10,000 limit and you have a $1,000 balance on it.

This is your utilization ratio per card:

Card A = 42% (2,500/6,000 = .416, or 42%), which is too high.

Card B = 10% (1,000/10,000 = .100, or 10%), which is awesome.

This is your overall credit utilization ratio: 22% (3,500/16,000 = 0.218), which is very good.

But here’s the problem: Even if you pay your balance off every month (and you should), if your payment is received after the reporting date, your reported balance could be high — and that negatively impacts your score because your ratio appears inflated.

So pay your bill just before the closing date. That way, your reported balance will be low or even zero. The FICO method will then use the lower balance to calculate your score. This lowers your utilization ratio and boosts your score.

Okay, let’s build on what you just learned about utilization ratios.

In the above example, you have balances on more than one card. Note that Card A has a 42% ratio, which is high, and Card B has a wonderfully low 10% ratio.

Since the FICO score also looks at each card’s ratio, you can bump up your score by paying down the card with the higher balance. In the example above, pay down the balance on Card A to about $1,500 and your new ratio for Card A is 25% (1,500/6,000 = .25). Much better!

3. Pay Twice a Month

Let’s say you’ve had a rough couple of months with your finances. Maybe you needed to rebuild your deck (raising my hand) or get a new fridge. If you put big items on a credit card to get the rewards, it can temporarily throw your utilization ratio (and your credit score) whack.

You know that call you made to get the closing date? Make a payment two weeks before the closing date and then make another payment just before the closing date. This, of course, assumes you have the money to pay off your big expense by the end of the month.

Take care not to use a credit card for a big bill if you plan to carry a balance. The compound interest will create an ugly pile of debt pretty quickly.

Credit cards should never be used for long-term loans unless you have a card with a zero percent introductory APR on purchases.

Even then, you have to be mindful of the balance on the card and make sure you can pay the bill off before the intro period ends.

If you tend to have problems with overspending, don’t try this.

The goal is to raise your credit limit on one or more cards so that your utilization ratio goes down. But again, this only works out in your favor if you don’t feel compelled to use the newly available credit.

I also don’t recommend trying this if you have missed payments with the issuer or have a downward-trending score. The issuer could see your request for a credit limit increase as a sign that you’re about to have a financial crisis and need the extra credit. I’ve actually seen this result in a decrease in credit limits. So be sure your situation looks stable before you ask for an increase.

That said, as long as you’ve been a great customer and your score is reasonably healthy, this is a good strategy to try.

All you have to do is call your credit card company and ask for an increase to your credit limit. Have an amount in mind before you call. Make that amount a little higher than what you want in case they feel the need to negotiate.

Remember the example in #1? Card A has a $6,000 limit and you have a $2,500 balance on it. That’s a 42% utilization ratio (2,500/6,000 = .416, or 42%).

If your limit goes up to $8,500, then your new ratio is a more pleasing 29% (2,500/8,500 = .294, or 29%). The higher the limit, the lower your ratio will be and this helps your score.

5. Mix It Up

A few years back, I realized I didn’t have much of a mix of credit. I have credit cards with low utilization ratios and a mortgage, but I hadn’t paid off an installment loan for a couple of decades.

I wanted to raise my score a nudge, so I decided to get a car loan at a very low rate. I spent a year paying it off just to get a mix in my credit. At first, my score went down a little, but after about six months, my score started increasing. Your credit mix is only 10% of your FICO score, but sometimes that little bit can bump you up from good credit to excellent credit.

5 categories that make up your credit score

I wasn’t planning on applying for credit within the next six months, so my approach was fine. But if you’re refinancing your mortgage (or planning something else really big) and you want a quick boost, don’t use this strategy. This is a good one for a long-term approach.

Bottom Line

When you want to boost your credit score, there are two basic rules you have to follow:

First, keep your credit card balances low.

Second, pay your bills on time (and in full). Do these two things and then toss in one or more of the sneaky ways above to give your score a kickstart.

And remember — you do not have to carry a balance to build a good score. If you do that, you’re on a slippery slope to debt.

Источник: https://clark.com/credit/5-sneaky-ways-to-increase-your-credit-score/

8 Ways to Build Credit Fast

Want a higher credit score? Soon your cash could help

If your credit score is lower than you'd , there may be quick ways to bring it up. Depending on what's holding it down, you may be able to tack on as many as 100 points relatively quickly.

Scores in the “fair” and “bad” areas of the credit score ranges could see dramatic results — leading to more access to loans or credit cards, and at better terms.

Check your free credit score, get personalized insights. Weekly updates let you track your progress.

If you’re struggling with a low score, you’re better positioned to quickly make gains than someone with a strong credit history.

Is a 100-point increase realistic? Rod Griffin, director of public education for credit bureau Experian, says yes. “The lower a person’s score, the more ly they are to achieve a 100-point increase,” he says. “That’s simply because there is much more upside, and small changes can result in greater score increases.”

And if you’re starting from a higher score, you ly don’t need a full 100 points to make a big difference in the credit products you can get. Simply continuing to polish your credit can make life easier, giving you a better chance of qualifying for the best terms on loans or credit cards.

Here are some strategies to quickly improve or rebuild your profile:

No strategy to improve your credit will be effective if you pay late. Why? Payment history is the single biggest factor that affects credit scores, and late payments can stay on your credit reports for seven years.

If you miss a payment by 30 days or more, call the creditor immediately. Arrange to pay up if you can and ask if the creditor will consider no longer reporting the missed payment to the credit bureaus.

Even if the creditor won’t do that, it’s worth getting current on the account ASAP. Every month an account is marked delinquent hurts your score. Fortunately, the impact of a missed payment fades over time. Showing lots of positive credit behaviors after a misstep can help offset the damage more quickly and eventually improve your credit.

2. Make frequent payments

If you are able to make small payments — often called micropayments — throughout the month, that can help keep your credit card balances down and improve your credit. Making multiple payments throughout the month moves the needle on a credit score factor called credit utilization. After payment history, this is another factor that highly influences your score.

If you're able to keep your utilization low instead of letting it build toward a payment due date, it should benefit your score right away. (You can track your credit utilization on each card and overall by viewing your credit profile with NerdWallet.)

When your credit limit goes up and your balance stays the same, it instantly lowers your overall credit utilization, which can improve your credit.

Call your card issuer and ask if you can get a higher limit without a “hard” credit inquiry, which can temporarily drop your score a few points.

If your income has gone up or you've added more years of positive credit experience, you have a decent shot at getting a higher limit. Some issuers may also be willing to work with you during the COVID-19 crisis.

A mistake on one of your credit reports could be pulling down your score. Fixing it can help you quickly improve your credit.

You're currently entitled to a free report every week from each of the three major credit bureaus: Equifax, Experian and TransUnion. Use AnnualCreditReport.com to request those reports and then check them for mistakes, such as payments marked late when you paid on time or negative information that’s too old to be listed anymore.

Once you've identified them, dispute those errors to get them removed. The credit bureaus have 30 days to investigate and respond. Some companies offer to dispute errors and quickly improve your credit, but proceed with caution before you choose this option.

If you have a relative or friend with a long record of responsible credit card use and a high credit limit, consider asking if you can be added on one of those accounts as an authorized user. The account holder doesn’t have to let you use the card — or even tell you the account number — for your credit to improve.

This works best for if you have a thin credit file, and the impact can be significant. It can fatten up your credit file, give you a longer credit history and lower your credit utilization.

Another method that can be used either to build credit from scratch or improve your credit is by using a secured credit card. This type of card is backed by a cash deposit; you pay it upfront and the deposit amount is usually the same as your credit limit.

You use it a normal credit card, and your on-time payments help your credit. Choose a secured card that reports your credit activity to all three credit bureaus.

You may also consider looking into alternative credit cards that don't require a security deposit.

If you're racing to improve your credit profile, be aware that closing credit cards can make the job harder. Closing a credit card means you lose that card’s credit limit when your overall credit utilization is calculated, which can lead to a lower score. Keep the card open and use it occasionally so the issuer won’t close it.

Frequently asked questions

How fast can you raise your credit?

Someone with a low score is better positioned to quickly make gains than someone with a strong credit history. Paying bills on time and using less of your available credit limit on cards can raise your credit in as little as 30 days.

How can I raise my credit in 30 days?

Paying bills on time and paying down balances on your credit cards are the most powerful steps you can take to raise your credit. Issuers report your payment behavior to the credit bureaus every 30 days, so positive steps can help your credit quickly.

How do I get my credit score up 100 points in one month?

If you have a low score, you’re better positioned to make gains than someone with a good credit score. Depending on what's holding it down, you may be able to add as many as 100 points through positive credit habits paying on time or using less of your available credit.

You can check your progress with a free credit score and weekly updates.

What's next?

  • Sign up to get your free credit score and report from NerdWallet. Information is updated weekly, and the factors affecting your score are broken out to make them easier to understand.
  • Learn how you can manage your credit with NerdWallet.

Источник: https://www.nerdwallet.com/article/finance/raise-credit-score-fast

How to Improve Your Credit Score Fast

Want a higher credit score? Soon your cash could help

Your credit score—a three-digit number lenders use to help them decide how ly it is they'll be repaid on time if they grant you a credit card or loan—is an important factor in your financial life. The higher your scores, the more ly you are to qualify for loans and credit cards at the most favorable terms, which will save you money.

If your credit history is not where you want it to be, you're not alone. Improving your credit scores takes time, but the sooner you address the issues that might be dragging them down, the faster your credit scores will go up.

You can increase your scores by taking several steps, establishing a track record of paying bills on time, paying down debt and taking advantage of tools Experian Boost™† , a new product that allows you to add utility and cell phone bills to your credit file.

You ly have dozens, if not hundreds, of credit scores.

That's because a credit score is calculated by applying a mathematical algorithm to the information in one of your three credit reports, and there is no one uniform algorithm employed by all lenders or other financial companies to compute the scores. (Some credit scoring models are very common, the FICO® Score☉ , which ranges from 300 to 850.)

You don't have to get hung up on having multiple scores, though, because the factors that make your scores go up or down in different scoring models are usually similar. “What makes one score go up versus down is always going to be the same—it just depends on the degree,” says Barry Paperno, a consumer credit expert.

Most scoring models take into account your payment history on loans and credit cards, how much revolving credit you regularly use, how long you've had accounts open, the types of accounts you have and how often you apply for new credit.

Understand the reasons that help or hurt your FICO® Score, including your payment history, how much credit you are using, as well as other factors that influence your overall credit.

Get Your FICO® Score

To improve your scores, start by checking your credit scores online. When you get your scores, you will also get information about which factors are affecting your scores the most.

These risk factors will help you understand the changes you can make to start improving your scores.

You will need to allow some time for any changes you make to be reported by your creditors and subsequently reflected in your credit scores.

Of course, certain credit score factors are typically more important than others. Payment history and credit utilization ratios are among the most important in many critical credit scoring models, and together they can represent up to 70% of a credit score, which means they're hugely influential.

Focusing on the following actions will help your credit scores improve over time. A credit score reflects credit payment patterns over time, with more emphasis on recent information.

1. Pay Your Bills on Time

When lenders review your credit report and request a credit score for you, they're very interested in how reliably you pay your bills. That's because past payment performance is usually considered a good predictor of future performance.

You can positively influence this credit scoring factor by paying all your bills on time as agreed every month. Paying late or settling an account for less than what you originally agreed to pay can negatively affect credit scores.

You'll want to pay all bills on time—not just credit card bills or any loans you may have, such as auto loans or student loans, but also your rent, utilities, phone bill and so on. It's also a good idea to use resources and tools available to you, such as automatic payments or calendar reminders, to help ensure you pay on time every month.

If you're behind on any payments, bring them current as soon as possible. Although late or missed payments appear as negative information on your credit report for seven years, their impact on your credit score declines over time: Older late payments have less effect than more recent ones.

2. Get Credit for Making Utility and Cell Phone Payments on Time

If you've been making utility and cell phone payments on time, there is a way for you to improve your credit score by factoring in those payments through a new, free product called Experian Boost.

Through this new opt-in product, consumers can allow Experian to connect to their bank accounts to identify utility and telecom payment history. After a consumer verifies the data and confirms they want it added to their Experian credit file, an updated FICO® Score will be delivered in real time.

Visit experian.com/boost now to register. By signing up for a free Experian membership, you will receive a free credit report and FICO® Score immediately.

3. Pay off Debt and Keep Balances Low on Credit Cards and Other Revolving Credit

The credit utilization ratio is another important number in credit score calculations. It is calculated by adding all your credit card balances at any given time and dividing that amount by your total credit limit. For example, if you typically charge about $2,000 each month and your total credit limit across all your cards is $10,000, your utilization ratio is 20%.

To figure out your average credit utilization ratio, look at all your credit card statements from the last 12 months. Add the statement balances for each month across all your cards and divide by 12. That's how much credit you use on average each month.

Lenders typically to see low ratios of 30% or less, and people with the best credit scores often have very low credit utilization ratios. A low credit utilization ratio tells lenders you haven't maxed out your credit cards and ly know how to manage credit well. You can positively influence your credit utilization ratio by:

  • Paying off debt and keeping credit card balances low.
  • Becoming an authorized user on another person's account (as long as they use credit responsibly).

4. Apply for and Open New Credit Accounts Only as Needed

Don't open accounts just to have a better credit mix—it probably won't improve your credit score.

Unnecessary credit can harm your credit score in multiple ways, from creating too many hard inquiries on your credit report to tempting you to overspend and accumulate debt.

5. Don't Close Unused Credit Cards

Keeping unused credit cards open—as long as they're not costing you money in annual fees—is a smart strategy, because closing an account may increase your credit utilization ratio. Owing the same amount but having fewer open accounts may lower your credit scores.

6. Don't Apply for Too Much New Credit, Resulting in Multiple Inquiries

Opening a new credit card can increase your overall credit limit, but the act of applying for credit creates a hard inquiry on your credit report. Too many hard inquiries can negatively impact your credit score, though this effect will fade over time. Hard inquiries remain on your credit report for two years.

7. Dispute Any Inaccuracies on Your Credit Reports

You should check your credit reports at all three credit reporting bureaus (TransUnion, Equifax, and Experian, the publisher of this piece) for any inaccuracies.

Incorrect information on your credit reports could drag your scores down. Verify that the accounts listed on your reports are correct. If you see errors, dispute the information and get it corrected right away.

Monitoring your credit on a regular basis can help you spot inaccuracies before they can do damage.

If you have negative information on your credit report, such as late payments, a public record item (e.g., bankruptcy) or too many inquiries, you should pay your bills and wait. Time is your ally in improving your credit scores. There is no quick fix for bad credit scores.

The length of time it takes to rebuild your credit history after a negative change depends on the reasons behind the change. Most negative changes in credit scores are due to the addition of a negative element to your credit report, such as a delinquency or collection account. These new elements will continue to affect your credit scores until they reach a certain age.

  • Delinquencies remain on your credit report for seven years.
  • Most public record items remain on your credit report for seven years, although some bankruptcies may remain for 10 years.
  • Inquiries remain on your report for two years.

Rebuilding your credit and improving your credit scores takes time; there are no shortcuts.

Start improving your credit by checking your FICO® Score from Experian data and reviewing the individual factors that are affecting your credit scores. Then, learn more about how to build credit to improve your scores.

And if you need help with credit mistakes from your past, you can learn more about credit repair and how to fix your credit.

If you simply don't have a credit score because you have little experience or history with credit, you ly have a thin credit file.

That means you have few (if any) credit accounts listed on your credit reports, typically one to four.

Generally, a thin file means a bank or lender is unable to calculate a credit score because there is not enough information in a user's credit history to do so.

There are things you can do to fatten up your thin credit file, such as applying for a secured credit card, becoming an authorized user on someone else's credit card or taking out a credit builder loan.

Check out more tips on how to build credit here.

One common question involves understanding how specific actions will affect a credit score. For example, will closing two of your revolving accounts improve your credit score? While this question may seem easy to answer, there are many factors to consider.

  • Credit scores are based entirely on the information found on an individual's credit report.
  • Any change to the credit report could affect the individual's credit score.

Simply closing two accounts not only lowers the number of open revolving accounts, but it also decreases the total amount of available credit. That results in a higher utilization rate, also called the balance-to-limit ratio (which generally lowers scores).

One change can affect many items on a credit report. It is impossible to provide a completely accurate assessment of how one specific action will affect a person's credit score. This is why the credit risk factors provided with your score are important. They identify what elements from your credit history are having the greatest impact so that you can take appropriate action.

Credit scoring involves complex calculations, and the more you know about how credit reports and credit scores work, the more you can take control of your own credit. In addition to knowing the most important factors considered in credit scoring, it can be helpful to know a few other facts about credit reports and credit scores. These components tend to be the most important:

  • Negative information on your credit report can lower your credit scores. That information remains on your credit report for a set period of time. For example, late payments appear for seven years from the date you first missed a payment. Paying off a collection account won't immediately remove it from your credit report. Bankruptcies can remain on your report for seven to ten years, depending on the type of bankruptcy. The good news is, all negative information will eventually cycle off your credit report. Until it does, focus on the things you can positively influence, including paying all your bills on time.
  • You don't need to carry a monthly credit card balance to build your credit history. You can pay off your credit card bills every month and positively affect your credit standing.
  • Settling accounts for less than the full amount you owe can harm your credit scores. Any time you fail to repay a debt as you originally agreed, it can negatively affect your credit. That said, the negative impact of settlement is still less than the negative effect of not paying a debt at all or declaring bankruptcy.

A good credit score can open doors for you. From helping you qualify for the best interest rates and terms when you borrow money to influencing how much you pay for life insurance, some might be doors you never even dreamed existed. Landlords will consider your credit scores when you apply to rent, and even telecom companies might look at your scores before you lease your next smartphone.

Considering how important credit scores are to your overall financial well-being, it's wise to do everything you can to ensure yours are as good as possible.

Regularly checking your credit report and credit scores are the critical first step. When you check your credit score from Experian, you'll see a list of specific factors affecting it.

Focusing on those factors first is the best way to start improving your credit scores.

Want to instantly increase your credit score? Experian Boost™ helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.

This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.

Источник: https://www.experian.com/blogs/ask-experian/credit-education/improving-credit/improve-credit-score/

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