5 Ways To Improve Your Credit Score
Tue 10 January 2017
Filed under misc
Your credit score has a huge impact on so many things in your life. It can determine whether or not you are able to rent an apartment or buy a house. Your credit score can affect snabblån how much you pay for insurance. Your credit score will also affect whether or not you’re able to secure an auto loan and how much interest you will pay when you do. Most people understand that one key to maintaining a good credit score is to pay your bills on time. However, building and keeping a good score goes beyond simply timely payments. Following are five ways to improve your credit score, beyond simply paying your bills on time.
Goodwill deletions. It happens to even the most conscientious consumers. Unexpected circumstances result in a late payment. Even one late payment can negatively affect your score. If you have a solid on time payment history with a lender, except for one late payment, call them and ask if they will make a goodwill deletion. Basically, a goodwill deletion is not saying the report is wrong or that you made the payment on time, but rather that the lender is going to give you a little slack. Many lenders are willing to do this for customers who otherwise have a good payment history with them.
Pay your credit accounts before the statement date. Part of your FICO score is based on your available credit balance. If you have credit cards that are maxed out, credit bureaus look on those less favorably than someone who has credit cards with only a small balance and lots of credit at their disposal. If you use your credit cards and then pay them off each month, in full, make your payment before the statement date. The credit card company typically reports balances as of the statement date. So, if you’ve used your Mastercard to pay for gas and groceries all month and have run up a high balance, even if you pay it off by the due date, it will show on your credit report as having that balance.
Pay off your collection accounts, in exchange for their removal. An account in collection is a big hit on your credit score. However, even when paid, they will still show on your report and negatively affect your score. Contact the collection agency and agree to pay off the account in exchange for them removing the item from your report. Many will do this, since their primary concern is getting paid for the accounts they’ve purchased from your previous creditor. However, be certain to get this agreement in writing before you make payment and then check your credit report to make sure it’s been deleted.
Don’t open too many accounts too quickly. You may be eager to start building your credit score, but opening up a dozen credit accounts one-after-the-other, will send your score plummeting. Instead, start off with one or two accounts, such as a credit card and an auto loan. Paying on these two accounts in a timely manner will be way more effective in raising your score than having your wallet filled with credit cards.
Don’t close old accounts. Part of your credit score is determined by the age of your accounts. Although you may think it would be better to close that old credit card you don’t use anymore, it could negatively impact your score. Keep older credit cards active, to show longevity in your credit history. If you are just building your credit score for the first time, ask your parents to add you as an authorized user to one of their established credit cards that has a history of timely payments. This can give you a boost, even when you are newly building your score. Visit your local Chicago area Nissan dealer today to find out how they can get you into your next new or used vehicle!