Banks and lenders decide who they should give money to and how much interest
should be applied on that loan based on credit and FICO scores. The higher
someone’s credit score, the more likely they are to get that money
and for less interest. This is also true when making a significant purchase
with a credit card, such as an automobile. If your credit score is high,
you will technically pay much less than someone with worse credit.
But what if you are that person with worse credit? Unpredictable circumstances
and simple mistakes can lead you into some financial straits that knock
down your credit score and FICO evaluation. Are you out of luck and should
expect to have a low credit score for the rest of your life?
Five Ways to Raise Your Credit Score
Nothing in the world of credit is permanent. There are plenty of people
each year who go into
bankruptcy and still bounce back with good credit and live better than ever before.
It all comes down to finding the right ways to
improve your credit score and make
repairs where needed.
Five factors to consider when trying to improve credit and FICO scores:
History: If you cannot pay off your credit card debt quickly, you need to try to
at least pay off the absolute minimum each month. Late payments or missing
payments will put a negative mark on your credit report for 7 years. But
even the minimal payment will increase your score over time.
Utilization: A creditor, bank, or lender wants to see that you have the ability to
use credit but not really the
need to use it. Your utilization is how much of your possible credit you use
each month on average. If you have a limit of $5,000 but only keep $2,000
on the card, your utilization is 40%. If you maintain a low utilization
percentage, your credit score can increase.
Duration: Opening a line of credit is one thing but keeping it is something else
altogether. New creditors and lenders are impressed when they see you
have been able to stay with a line of credit over the course of years,
rather than bouncing between cards and banks.
Inquiries: Applying for credit will put a “hard inquiry” mark on your
credit report for two years. Apply several times and banks start to get
suspicious about your financial stability. If you want to raise your credit
score, only make inquiries when absolutely necessarily.
Notoriety: You may not realize it but your negative public records, such as tax liens
or disadvantageous court judgements against you can and will hurt your
credit and FICO scores. An unpaid fee or fine that is completely unrelated
to your lines of credit will knock your score down. Be sure to meet legal
obligations to gradually improve your credit.
If you have more questions about repairing your credit,
contact Law Office of Simon Goldenberg, PLLC. Our New York debt relief attorney
can provide you with a
free case evaluation to get you pointed in the right direction, and to determine if there are
legal options you have overlooked that could help out your situation.
Just call toll-free
888.301.0584 to begin.