HOW I WAS ABLE TO GET MY CREDIT SCORE TO 798! Tips to Raise your Credit Score!
HOW I WAS ABLE TO GET MY CREDIT SCORE TO 798!
Tips to Raise your Credit Score!
First things first what is a credit score?
Your credit score is a three-digit number that relates to how likely you are to repay debt. Banks and lenders use it to decide whether they’ll approve you for a credit card or loan. The three main credit bureaus – Equifax, Experian and TransUnion – create your credit reports, which credit scoring models like VantageScore and FICO use to come up with a score that typically ranges from 300-850. The credit bureaus can also calculate scores for you based on their own proprietary models. Your scores are typically based on things like how often you make payments on time and how many accounts you have in good standing. Your score will never factor in personal information like your race, gender, religion, marital status or national origin.
Ok now that that is out of the way let’s talk ways to get this score boosted, baby!
1. RUN YOUR CREDIT REPORT
Yes, you know your score, but do you know what it entails. Use a site like Creditkarma.com or my personal fav creditsesame.com to get a free credit report. Many times, you will find that there are things being reported on your credit report that you had absolutely no idea about or items that do not even belong to you. A lot these items can be resolved with a quick phone call, a quick payment, or a credit dispute taken out with the reporting bureau. It’s all about handling your business and not being lazy! You should definitely know what’s on your credit report. Once these things are handled you will see an increase in your score.
2. PAY OFF YOUR DEBT
This goes without saying the least you owe the higher your score. So, develop a plan to get you debt paid off. My personal favorite plan is the Dave Ramsey Debt Snowball. List all your debt from smallest to largest and pay the minimum payment on all debt except the smallest amount. Throw all your extra money plus the minimum at the smallest amount. For example, if your smallest minimum payment is $35 and after completing your budget you have an extra $200 leftover you would then pay $235 every month on that debt until it is paid off and then add the $235 to the next smallest debt’s minimum payment. Also, in the meantime of paying off that debt any extra money that comes your way would go to this debt.
As your debt decreases you will noticeably see your credit score increase!
3. INCREASE YOUR CREDIT LIMITS
If this is an option for you definitely take advantage. Increasing your credit limit will make the current balanced owed look a lot better. For example, if you’ve maxed out your $1,000 card and get a limit increase to $2,000, you’ve instantly cut your credit utilization rate in half. The key is to not spend any of your new credit. It defeats the purpose of getting a limit increase if you immediately charge the card up to $2,000.
4. OPEN AN EW ACCOUNT
If your current credit card issuer balks at the idea of increasing your credit limit, apply for a card from a different issuer. It will still help your credit utilization rate, since your utilization rate is based on all your open lines of credit and balances.
So, an individual with $10,000 in credit who owes $5,000 will have a 50 percent credit utilization rate regardless of whether that $5,000 is on one card or spread out over multiple cards.
Be aware, though, that opening multiple accounts at once is not good either. Too many new accounts can make you look like you desperately want to go on a spending spree. Don’t risk dinging your credit score — apply for only one or two new cards if you’re going to try this strategy.
5. NEGOTIATE OUTSTANDING BALANCES
Maybe your credit score took a dive because you have bills in debt collections. You can’t wipe out past mistakes from your credit report, but you can do some damage control by settling them.
Dummies.com has a short, easy-to-understand primer on how to negotiate your debt. The most important step is to get an agreement in writing.
If you don’t have any cash on hand to offer as a settlement, you can sell some of your stuff or try one of these “20 Unusual Ways to Earn Extra Cash.”
6. CUT UP ALL BUT ONE CREDIT CARD BUT DO NOT CLOSE THE ACCOUNTS
This will ensure that you don’t pile on any new debt while working on becoming debt free! The one card that you keep is strictly for emergencies or if you are disciplined enough is a card for the perks so use it for everyday items to earn points, cash back, etc but pay it off immediately.
Hit me up with any questions you may have, and I hope these quick tips help to boost your score! I have followed all of these steps and I am now working with a 798-credit score and I am still striving for that 850!
With Love,
Jasmine Kaye
Sources:
https://www.moneytalksnews.com/7-fast-ways-raise-your-credit-score/