Increase Credit Score
TweetIncrease Credit Score - WHAT NOT TO DO!
Have you recently been turned down for a loan or had your credit application rejected due to a poor credit score? You may be wondering how to increase your credit score in order to qualify a loan or new credit. There are many ways to increase credit scores to make you look more creditworthy in the eyes of lenders. Increasing credit scores not only qualifies you for new credit it also makes you eligible for loans with the best rates and terms available, which will save you thousands in the long-run.
Increase credit score - stop hurting your credit. Whatever proactive steps you are taking to increase your credit score, they will be undermined by bad habits that hurt your score. Here are the most common damaging habits:
- Maxing out credit cards
- Missed payments
- Lowering credit limits
- Consolidating accounts
- Applying for too much or unnecessary credit
- Aren't keeping accounts active
Increase credit score: stop maxing out your credit card(s). Maxing out a credit card looks like you have to rely on credit to cover your expenses; immediately putting you in the high risk category. It doesn't matter if you pay off the maxed out balance at the end of the billing period; it's the balance on your last statement that's typically reported to the bureaus.
Increase credit score: don't miss payments. Missing just one monthly payment could decrease your score by up to 100 points. The higher your score, the more you stand to lose. It truly does not take much to trash your credit.
Increase credit score: don't request to have your limits lowered. Once you have accepted a credit limit, you are stuck with it unless you are willing to take a hit. Reduced limits could affect your credit utilization ratio; the gap between your total debt and your available credit.
Increase credit score: be careful with consolidating your accounts. Transferring balances from a high-limit card to a lower-limit card or transferring all or most of your credit-card balances onto a single card can hurt credit scores. In general, it's better to have smaller balances on a few cards than one big balance on a single card.
Increase credit score: don't apply for too much new credit. Applying for new credit is a dichotomy. If you don't have any credit accounts, or maybe only one or two, you have to apply for new credit if you want to increase credit scores. Have a mix of different types of loans. You should have at least one installment and two revolving credit accounts.
Increase credit score: keep credit accounts active. You can't increase your credit scores if you don't use credit. But, there is a fine line between using credit to your advantage and carrying too much debt. Credit scoring models try to predict how well you're likely to manage credit in the future by how well you've managed it in the past. If you don't continue to use some type of credit, eventually your credit reports won't even generate credit scores.
