So you’re looking to increase your credit score fast?
Enclosed are super important things to remember to ensure that your credit score never drops again.
These things are absolute musts if you want to achieve impressive results to rebuild and maintain your good credit status for the rest of your life.
Remember that bad credit scores end up costing you thousands of dollars in higher interest rates and fees so save yourself time, energy, effort and embarrassment from a crappy credit score!
[ATTN Brokers: Please share this information with your credit sweep clients]
FICO CREDIT SCORE MODEL – HERE IS THE BREAKDOWN OF THE MOST COMMON SCORING METHOD (If you cannot see the image, click SHOW IMAGES so you can see this)
Tip #1. Pay Your Bills On Time.
No more 30 day lates! I repeat, pay your bills on time.
As you can see from the FICO model above, payment history is the LARGEST portion of your credit score, a whopping 35%. If you are unable to pay on the due date, make sure that you pay the bill within 30 days of the due date. If you don’t, then you risk having a “30 days late” payment added to your credit report, to which your score will drop immediately and you will incur late fees.
At times in life, you may forget to pay your bills, or you may not be able to pay it exactly on the due date, but NEVER again, should you make a payment past 30 days late.
You can also contact your lender and ask if a hardship extension is available. Late payments are among the hardest things to remove from a credit report so I will not always be able to fix brand new late pays for you.
Hands down this need to be your number 1 priority!
**Remember that just because you finally get around to paying a bill late (i.e. more than 30 days late), that will NOT erase your late payment(s) history. The only way to avoid late payments is by NOT having them.**
Tip #2. Pay above the minimum payment due on credit cards and loans.
Even if it’s just 1 dollar, pay above the minimum because this will throw off the scoring algorithm showing that you make above the minimum just payments. This will help your score over time.
Tip #3. Make sure you have at least 3 positive reporting tradelines on your credit report so you look favorable to lenders.
A tradeline is any type of credit account (credit card, car note, mortgage, store credit card, furniture credit card, etc.) These are all tradelines.
So if you have only 1 positive tradeline, you will need to establish 2 more positive tradelines in order to be effective while we are attacking the inaccurate negative items on your credit reports.
Contact us to help you select an authorized user tradeline that will attack the weaknesses in your credit score, and help you achieve your goals.
Tip #4. Don’t max out your credit cards.
This will decrease your credit score because credit utilization comprises 30% of your credit score (this is the second largest portion of your credit score.)
Begin to pay your credit cards down if they are over 30% utilization. You should aim to get your credit cards under 30% utilization before you apply for any major loans.
The best way to tackle credit card debt to effectively help your credit score at the same time is to begin paying off the balance of the LOWEST CREDIT LIMIT FIRST.
For example, if you have two credit cards, one is $5,000 and maxed out, and one has a $300 credit limit and is maxed out – you should start chipping away at the lowest credit limit first which is the $300 card and work towards paying it down to at least $209. That way instead of 100% utilization, you are at only 29% utilization.
You want to keep your cards under 30% utilization in order to maximize this portion of your credit score. Here is a link to a % calculator so you can see exactly how much you would need to pay to get your balance under 30% percent calculator.
Tip #5. Don’t pay off your collections and think they will be automatically removed from your credit report.
This is not how it works. If you intend to pay off a collection or bad debt, please contact us so we can work through pay in lieu of deletion method which would be done in writing to protect you from the collection agency.
Tip #6. Don’t close your credit card accounts.
Keep them open! If you close them, then your credit score will drop because you are reducing the age, account, and activity needed to generate certain major portions of your credit score. If you feel you don’t want to use the credit cards ever again, simply place them in a drawer or cut them up.
You need open positive credit in order to maintain a good credit score so do not close your credit card accounts.
If you need ANY help selecting tradelines, exploring credit sweeps, primary tradelines or inquiry removal, please call or text us at 904-515-6698.
We have a wealth of experience unleashing these products to their full potential.