Credit Score Boosts

Everyone wants to boost their Credit Score, right? I mean, why
would anyone want to pay a higher Interest Rate, whether it’s
for a home, a car, or the credit cards? Whether you have good
credit, or are credit challenged, the following information is
designed to help you boost your Credit Score significantly over
a period of months Are you ready to form a few good habits?
Let’s get started
First, we’ll take a look at what your Credit Score (aka FICO
Score) is based on In other words, these are the factors the
Major Credit Agencies use to compute your rating
Payment History 30%
Outstanding Debt 30%
Length of Credit History 15%
Recent Credit Inquiries 10%
Types of Credit In Use 10%
We can see immediately that Payment History and Outstanding Debt
determines a full 60% of your Credit Score
We’ll take a look at Outstanding Debt first In the eyes of the
Credit Rulers that be, there is Good Debt and Bad Debt Yes,
Good Debt and Bad Debt
Good Debt is anything with underlying value, or the potential of
either a return on the investment, or investment growth Real
Estate Debt (home loans and mortgages, yes, even your Time
Share) and Education Debt (Student Loans, College, Trade
Schools) are Good Debt and (when paid on time) actually increase
more than your social standing They increase your Credit Score,
as well
What about that sports car or luxury sedan in your driveway?
Isn’t that valuable? Wouldn’t that be considered Good Debt? No,
it’s value decreased appreciably the minute you drove it out of
the Dealer’s Lot Unless it’s a world recognized collector’s
item, in the credit world, it is nothing more than a beautiful
ride and it falls directly into the Bad Debt category
Bad Debt is the Luxury Car, the retail jewelry purchased with a
credit card, the unpaid credit card balances – in short – Bad
Debt is consumer debt, which is usually incurred via credit
cards Don’t worry, almost everyone has some Bad Debt If it
isn’t out of hand, it can also be used to boost your Credit
Score
Good Debt usually carries a fixed balance No problem Pay it
early, or on time, and it will be the firm foundation of a good
Credit Score
Bad Debt is a bit different Let’s take a look at using it to
boost your score in a relatively quick period of time First of
all, if you have more than two or three credit cards, single out
those you can afford to pay off completely – as soon as
possible Next, you want to make sure that you never carry more
than 30% of the maximum balance on any one credit card In other
words, if your credit card maximum is $3,00000, never allow
yourself to max it out Keep it at $90000 to zero, at all
times This applies to every card you have
Many people pay their bills on time, but keep their credit card
balances over 30% or have charged them to the very limit Though
they never miss a payment, their Credit Scores are significantly
lower than those who keep their balances to a minimum Spread
your balances out, using whichever cards can bear part of the
credit load If you can manage to lower the balances carried to
30% or less on each credit card (and, of course, pay the
payments early or on time) you will watch your Credit Score jump
in just a few months
An even greater strategy, if you can afford it, is to completely
pay off those credit cards, but keep using them – every month
Yes, I said every month You will also pay the full balance owed
every month It goes like this: Charge everything with your
cards (even groceries) Pay every balance off monthly using the
cash you would have spent for those same expenses Keep using
the cards, keep paying the cards, keep the balances at zero
Even if you have a few credit dings, this strategy alone will
boost your Credit Score 40 – 50 points in no time
Now let’s talk about Payment History If you are used to paying
your bills on time, this part is easy Simply pay them a week or
so earlier In addition, if you’ve only been making the minimum
payment, pay a little (or a lot if you’re able) extra toward the
balance This is the “Early and Over” strategy
If you are using the “Charge and Pay” strategy above, paying
“Early and Over” will boost the results even higher Whether
it’s Good Debt or Bad Debt, no Lender will have a problem with a
larger payment Yes, even your Mortgage Company is happy to
apply an extra $10000, or even $5000, towards your home loan
balance every month If you’re just one of those people who has
the money, but sometimes forgets to put the check in the mail on
time, make a phone call and have the bill scheduled for
automatic debit from your Checking Account, and request an early
payment date If you’d rather, you can even arrange to pay your
bills online Do it a week early, and watch your Credit Score
jump The “Early and Over” strategy will also boost your Credit
Score significantly in a matter of months
Okay, almost done Let’s take a look at those last two credit
rating factors: Credit Inquiries and Types of Credit Remember
that time you were in the Department Store and they offered you
a discount on your purchase if you applied for their credit
card? Good Don’t do it ever again, please It hurts your Credit
Score, and it’s another bill to manage, or debt acquired
Thanks Now, Credit Types were already covered, but it’s worth
saying again: Please have only two or three major credit cards
open and carrying balances If you have more than that right
now, that’s okay Use the strategies provided, get them paid
off, and keep them at zero balances Request their closure, if
you’d like Please just don’t let it be the Credit Company that
closes the account due to non-payment or dreadful payment
history Another Thank You
This about sums it up Not only will the above strategies give
you fairly rapid Credit Score boosts, they are excellent life
time habits, worth developing as soon as possible Practiced
long-term, they will not only produce a stellar FICO Score, they
will help you manage your finances, keep your options open, and
pay your debts off faster
“Keep my options open? What does that mean?” you ask Well,
someday you may need unplanned for funds With a stellar FICO
Score, all doors are open to you, and at a far lower Interest
Rate than to those with lesser scores
“But what if I have Bad Credit? Can these strategies help me?”
Even if you’re somewhat credit challenged now, implement these
techniques as soon as possible Make them lifetime habits
Eventually you will have better credit, and all it cost was
paying the bills you had to pay anyway Not a bad deal In fact,
not a bad deal, at all

Tags | balances, beautiful, education, history, inquiries, investment, loans, luxury, payment, result, retail, student