How Do I Raise My Credit Score to Secure Financing?
Now, more than ever, you need to be concerned with your credit score. You need to be concerned with living within your means and not relying upon heavy credit card debt. As the lending requirements continue to tighten, it’s imperative that you know your credit score. If your score is lower than you want and/or need to secure financing, don’t panic! There are a lot of things you can do to ensure that your score will remain steady or rise.
Here are some tips on raising your credit score from the folks at MyFico.com.
1 – Pay Your Bills on Time – this one sounds pretty easy, but nowadays with online checking, just make sure that those electronic payments are actually making their way to their proper destinations.
2 – Be Aware that Paying Off a Collection Will NOT Remove It from Your Credit Profile – that payoff will remain for 7 years.
3 – Keep Balances Low on Credit Cards and Other Revolving Debts – if you have to charge, cap it at 35% of your available credit limit.
4 – Don’t Close Unused Accounts as a Short Term Strategy – this shortens the length of your credit history, and believe it or not, it actually hurts your score.
5 – If You Use Credit Cards, Manage Them Responsibly – You have to make timely payments for credit cards to help you. Otherwise, you are burying yourself with mounting debt, and your credit score is paying for it.
6 – Apply for and Open New Accounts Only as Needed – Credit scores are a product of a long term track record of money management. Opening accounts typically won’t work in the timeframe you are looking for.
7 – If You Have Missed Payments on Your Current Credit, Get Current and Stay Current – Ignorance is not bliss. One late payment may not be a show stopper, but the compounding effect of missing several payments in a row will drop the curtain.
8 – Pay Off Your Debt Rather than Moving It Around – Paying down your revolving credit is the most effective way to positively affect your score. Owing the same amount with fewer accounts looks better as well.
9 – Note: It’s Okay to Request and Check Your Credit Report – It’s a common myth that checking your credit will affect your score negatively. The key is that you have to check your credit through a credit reporting agency or through an organization authorized to provide credit reports to consumers.
Next to your social security number, your credit score is the next most important number for you to protect. Sometimes even when you are diligent in protecting your credit, bad things still happen. We have had one incident this year already where a client did not realize that someone had stolen his identity and run up massive debt in his name. It’s everywhere, and it is quite a disappointment when it occurs at a time when you are about to make one of the biggest purchases of your life – a home.
