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Five Ways to increase your FICO Credit Score

By George Hauser
Published: Wednesday, December 9th, 2009

Most creditors request from one or more of the credit bureaus your credit report or your credit score. You might not realize what the importance of your credit score is just by looking at it. But the truth is, this three digit number could determine your financial life. 

Each credit score acts as the summary of your creditworthiness. This means that just by looking at your credit score, lenders can somehow get an idea of what kind of borrower you are. 

Most creditors rely on the FICO score. It helps them decide on whether to approve your loan applications or not. You can find many credit score tips that can help you maintain your good credit score standing. There are also those which would tell you what things to avoid that hurt your score. 

Here are some credit score tips that could raise your FICO credit score. It is important however, to understand that although most creditors use the FICO score, there are still those who rely on different credit scores. 

Create new accounts

It seems simple, but what most credit score tips will tell you is to establish a credit card in your name emphasizing that you use it responsibly. Application can be a piece of cake but maintaining it to be in a good shape proves to be a challenge. You know that you are a responsible credit card holder if you pay your balances as regularly as you charge. Keep the balance below 25% of the credit limit. Another of those credit score tips on credit cards is to look for one that has high credit limit. 

Joint accounts

When you are not yet ready to apply for a credit card or a loan completely under your name, you should look for a co-signer. However, as what credit score tips advice, you should be wise in choosing a co-signer. Make sure that he or she has good credit standing so that s/he can lift your credit score too. 

Secured Debt

Most people would get the regular credit card until one day they realize that they can not keep up with its costs. A secured debt is not really a bad choice, especially when you are trying to fix your credit score or build good credit. Secured credit card is safer to use because there is no possibility of overcharging because the money you have when you apply for is the amount you will be using when you charge. 

Don’t apply for too much credit

One of the things that determine your credit score is the number of inquiries you make and the accounts you open. When you have too much credit applications in a span of short time, this can lower your credit score. It is because making inquiries and opening accounts raise the red flag for your creditors. They think that you are trying to escape your current credit. 

Increase credit card limits

Though you can try to negotiate with your creditor on your credit limit, you can also always reduce your balances below the limit. If you can not pay for your current balances, you should contact your creditor and inform them about your difficulty. This way you can both devise a special plan of payment.

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