02 Aug HOW TO KEEP OR INCREASE YOUR FICO SCORE
1. Obtain a credit card if you don’t have any
Having and using a credit card or two can really build your credit score. If you cannot get a regular credit card, try 2 secured credit card, where the bank gives you a credit line equal to the deposit you make. Look for a card that reports to all three credit agencies. If you can carry a small balance to the next month is better (do not put any balance on 7 days after your due dates.) When applying for a loan make them zero balance.
2. Add an installment loan (like an auto loan)
You will get better results in your scores if you show that you are handling revolving (credit cards) and installment (auto, mortgages and student loans).
3. Pay down your credit cards
Paying off or paying down your credit cards will increase your score. Your total balances and individual balances should be below 30% of your limits. Getting the balances under 10% of your limits is even better. Try to pay down the cards with small balances first ,then the ones closest to their limits or divide the balances between your cards to keep them under 30%.When applying for a mortgage or loan, try to get a personal loan to pay the credit cards debts and recharge the cards and pay the loans back when the mortgage loan was approved.
4. Make sure the cards report your limits to the bureaus
Some companies like American express do not report your limits to the 3 bureaus. Call them and find out. When they don’t report your limits the bureaus use your highest balances as your limit which creates 100% ratio and that kills your score.
5-Pay your bills on time
Late payments, even if only a few days and can have a big negative impact on your credit score. If you missed some payments, get current and stay on time. The longer you pay the bills on time (after being late), the more your score should increase. You can also Setup Payment alerts and set up payments automatically before the due dates (you can call your card issuers and find out when they report to the agencies and make sure to pay before that.
6—Do not close unused credit cards
Use those every couple of months to keep the history and also your total credit limits high
7-Don’t open a number of new credit cards in a short period, just to increase your credit limits.
This could backfire and lower your fico score. Apply for and get new credit cards only as you need.
Have credit cards, but manage them responsibly.New cards will lower your average account age, which will have a bigger negative effect on your score especially if you don’t have a lot of other credit data. Also, it could make you look riskier if you are new credit user.
8–Have fewer inquiries.
Every time you apply for a loan your credit gets pulled (inquiry), try to do it in 30 days, because having lots of inquiries will decrease your fico score. The bureaus will not count it against you if you have same category of inquires (car loans, mortgage) within 30 or so days.(all inquiries still will show in your reports , but the system will only count them as one)
9-Closing an account does not delete that.
A closed account will stay on your credit report, and may affect your score.
10-Get a gas store card/subprime issuers
Try to get a gas card or another kind of retail card or even on line merchandisers which will give you credit and reporting your limits to the bureaus will help your score.
11-Become an authorized credit card user on a friend or family member with good credit
Most people do not want to do this, but if you are new or you want to reestablish credit this is the best approach and the great thing is they don’t even have to give you the card. You don’t even need to know when it arrives in their mail box. But the higher the score and older the credit is better. Make sure that person is responsible and pays on time and no high balances on their cards.
12-Ask for forgiveness nicely
If you have only one or two late payments and you were a good customer for a long time, calling the company and asking for a favor, explain your situation may get the items deleted.
13-Check your Credit Reports regularly for any inaccuracy and errors.
Also read the bureaus comments in the end of reports, many time by doing a small action you can increase your score. For example some card issuers are finance companies not favored by the bureaus.
14-Dispute the inaccurate negative items yourself or use a legitimate credit repair specialist.
15-If you are in a position ask the creditors to increase your limits
This will decrease your balance ratio (Especially with a soft credit pull) which will help your score in the long run.
16- If you are settling your accounts/collections
Try to negotiate payment for deletion. Also paying your old collections may decrease your score.
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