Credit Restoration And Better Credit Scores
If you need to raise your credit score, understanding how credit restoration works can help you achieve your goal and increase your credit score far more quickly. Credit repair isn't an impossible goal. You can raise your credit score by minimizing the impact of late payments on your credit and letting large credit limits work to your advantage. Still, you will want to make sure you take the right approach toward improving your credit score. It won't happen overnight, but it is possible.
First, did you realize that you can raise your FICO score without magic-bullet fixes? Instead, you'll need to be determined to change your financial profile and make wise credit choices from now on, especially when it comes to paying on time.
This is one of the biggest determiners of your credit score. If you have missed or been delinquent on payments, get current and stay current. Your payment history is reflected primarily from the most current 24 months, so start a new history. If you did not know a late payment or an unpaid account that goes into collections it can stay on your credit report for up to 7 years, so avoid late payments and do not forget to try to keep your balances low.
It's much easier to raise a credit score if you keep your revolving credit card balances low. You should aim for carrying balances at 50% or less of your total available credit, and 10-20% is even better. Keeping balances low helps you in two ways ? first, it helps you control spending, and second, it can raise your credit score.
For this reason, you might even consider opening an additional line of credit. You can even open a line that requires a security deposit, if you don't qualify for more unsecured credit. This can be helpful if you can't quickly pay down balances to below that 50% threshold. Obtaining new credit will increase your overall credit limit, and decrease the ratio of debt to open credit. While this can be a useful credit restoration strategy for some, others might not be able to handle the temptation to use this credit. Take a good look at your spending history to evaluate whether you really can handle new credit wisely. If not, it's better not to get new credit.
Part of the reason you don't want to open an account just as a quick fix is that your average account age will get lowered. Creditors look at the length of time you have been managing credit accounts, and rapid account buildup (opening up several accounts close together) will make you a credit risk, since you will seem like a new and inexperienced user. By having too many open accounts, creditors may think that you will not be able to pay them if you decide to max out your accounts, depending on the type of credit your trying for.
So, it's usually best to apply only for credit that you really need. Make sure to use a few different types of credit products too, and don't have too many revolving credit cards. For example, it's fine to have a credit card or two, plus a student loan and an auto loan. This way, creditors can see that you are able to make consistent payments on installment loans, and at the same time manage revolving credit responsibly.
If you need credit restoration because of prior credit mistakes, don't let it overwhelm you. Now that you have tools and strategies to repair your credit, you're ready to start on the path to improving your credit score. You can also take advantage of the many wonderful resources out there to help you increase your credit score.
Whether you choose to do it on your own or use one of the credit repair agencies, with some time you will be in the market for premium credit offers again. With the better credit offers, that is more money in your pocket, which gives you more to spend on other things besides interest. That's what makes you the winner in your own credit restoration.
First, did you realize that you can raise your FICO score without magic-bullet fixes? Instead, you'll need to be determined to change your financial profile and make wise credit choices from now on, especially when it comes to paying on time.
This is one of the biggest determiners of your credit score. If you have missed or been delinquent on payments, get current and stay current. Your payment history is reflected primarily from the most current 24 months, so start a new history. If you did not know a late payment or an unpaid account that goes into collections it can stay on your credit report for up to 7 years, so avoid late payments and do not forget to try to keep your balances low.
It's much easier to raise a credit score if you keep your revolving credit card balances low. You should aim for carrying balances at 50% or less of your total available credit, and 10-20% is even better. Keeping balances low helps you in two ways ? first, it helps you control spending, and second, it can raise your credit score.
For this reason, you might even consider opening an additional line of credit. You can even open a line that requires a security deposit, if you don't qualify for more unsecured credit. This can be helpful if you can't quickly pay down balances to below that 50% threshold. Obtaining new credit will increase your overall credit limit, and decrease the ratio of debt to open credit. While this can be a useful credit restoration strategy for some, others might not be able to handle the temptation to use this credit. Take a good look at your spending history to evaluate whether you really can handle new credit wisely. If not, it's better not to get new credit.
Part of the reason you don't want to open an account just as a quick fix is that your average account age will get lowered. Creditors look at the length of time you have been managing credit accounts, and rapid account buildup (opening up several accounts close together) will make you a credit risk, since you will seem like a new and inexperienced user. By having too many open accounts, creditors may think that you will not be able to pay them if you decide to max out your accounts, depending on the type of credit your trying for.
So, it's usually best to apply only for credit that you really need. Make sure to use a few different types of credit products too, and don't have too many revolving credit cards. For example, it's fine to have a credit card or two, plus a student loan and an auto loan. This way, creditors can see that you are able to make consistent payments on installment loans, and at the same time manage revolving credit responsibly.
If you need credit restoration because of prior credit mistakes, don't let it overwhelm you. Now that you have tools and strategies to repair your credit, you're ready to start on the path to improving your credit score. You can also take advantage of the many wonderful resources out there to help you increase your credit score.
Whether you choose to do it on your own or use one of the credit repair agencies, with some time you will be in the market for premium credit offers again. With the better credit offers, that is more money in your pocket, which gives you more to spend on other things besides interest. That's what makes you the winner in your own credit restoration.
About the Author:
If your thinking about credit restoration you should explore all your options. Credit repair can be a a big task, so be sure to know the facts. Come see what the experts have to say about slashing debt and repairing your credit.
posted by Debt Consolidation Loan at
9:27 AM
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