No matter what people say, it takes time and patience to permanently improve your credit score. You are able to get loans at a low-interest rate and get credit card rewards when you have a good score. It may be time-consuming, but it isn’t impossible. In this article, you will learn exactly how to make it possible. You should start by checking your current position and setting goals you wish you accomplish.
Never Delay Any Payments
Show the lenders that you are a responsible person when it comes to credit. Payment history plays an important role here. A good credit score shows that you are capable of paying debts. So you need to avoid third party collections, late payments, foreclosures, repossessions, and defaults. Most of all, don’t file yourself bankrupt.
Watch Credit Utilization
Using too much available credit indicates risk. This is not a practice you should adopt. Evaluate credit limit and balance relative to ensure you aren’t risking your score. You get fewer points when you have a high ratio, which prevents the credit score from improving. An ideal rate varies from person to person and the scoring system. For example, 10% is a perfect target in FICO’s system. On the other hand, VantageScore has a target of 30% or less. You should opt for a 0% rate if you already have high balances.
Don’t Wipe Old Debts
Many people try to try to remove the record of their old debts from their report. They believe it can have a negative impact on their score. The reality is totally opposite as long as you paid it in full and on time. Having a timely paid debt record can improve your credit score and credit card accounts. It shows that you are a responsible person, and lenders prefer this habit. If you have bad debts that can downgrade the score, it will be automatically removed with time. Closing an account isn’t necessarily going to help you.
Use Trade Lines
It is also known as seasoned authorized user trade lines. It’s a process of buying an aged credit item to improve credit score. It’s legal and has been in practice since the passing of 1970 Fair Credit Reporting Act. This piggybacking is particularly used for helping people with bad credit. You should contact a well-reputed company like Personal Trade Lines for assistance. They can get you over 5000 authorized user tradelines.
Think Before New Applications
You should be careful when applying for a new line of credit as it can risk your score. A hard inquiry temporarily lowers your score, and one is pulled on your report when you apply for new credit. This inquiry stays on the report for up to 2 years. Do your research and think about the probability of getting the card. A denied application isn’t something an already weak credit score can handle – apply only when you are sure. Moreover, don’t apply for more than one cards within a short period, especially when you are planning to take a big loan.