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.
Contact our customer service department with
any questions at: customerservice@americandebtnegotiation.com
