5 Tips for Achieving Stellar Credit Scores

The highest possible credit score is 850 while the lowest is 350. Only a small percentage of people score over 700, and so we thought you would appreciate a little advice on how to improve your rates. While poor credit scores are not as severe as personal injury, Vancouver BC, they will be the determinant for a lot of things, most importantly, asset acquisition. Do we have your attention now?

So, how do you repair your credit score? Contrary to popular belief, you do not have to be totally debt-free. Actually, being completely debt-free could ruin your credit score. How will lenders know your repayment patterns if you never borrow?

Here’s how!

  • Pay on Time

You want to pay the required minimum every time and make that payment timely. The most important thing in debt management is not allowing your debt to become overdue, seeing as this will lead to penalties. Any bill that becomes overdue shows your inability to manage your finances, and lenders will find that small detail very helpful.

  • Check your Credit Statement Periodically

Credit bureaus will give you free credit statements every month, and you want to check these reports thoroughly. You will be looking for missing positive information and any inaccurate information that could ruin your score. Look out for outdated information that should not be on your current credit report and report it immediately. A thorough check every four months could save you from poor scores.

  • Borrow Wisely

The fact that you have credit as an option does not mean that you should make poor judgment. Make smart decisions so that you don’t buy luxurious items that you can hardly afford. That said, you should use this opportunity to build your scores if your card is still new. How do you do that? By using your credit card more often in stores when making regular purchases. The trick is in making fill and timely payments at the end of the month.

  • Master your Credit Utilization Ratio

Say you have a $5,000 credit card limit. If you spend 2,500 per month, then your credit utilization ratio is 50 percent. You will only have $2,500 to carry forward to the next month. Tip: you want to limit your utilization to 25% to increase your credit score. The three top credit agencies ding you if your utilization is higher than 50%. Start by paying the 50% then reduce your usage to below 25%, and you will notice a significant change in your credit score.

  • Get Rid of Unused Credit Cards

Lenders do not look favorably at unutilized credit cards. If you opened several credit accounts, thanks to the salesmanship of some suave marketer and have never used most of them, then it’s time to prune. If you have a credit card with over 10 years of high scores, you might want to keep them because they show discipline and stability. Lenders will look at those scores with favor.

That, ladies and gents, is how you up your credit scores like a pro! Oh, and don’t forget to guard your credit information with your life. You don’t want to be an identity theft victim!

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