How Can I Raise My Credit Score?
From conversations with different lenders this is the most common question they received time and time again.Bank and mortgage companies have tightened up loan guidelines and credit scores have become increasingly important in securing the best loan terms.
Here are a few tips on how to quickly increase a credit score:
Keep credit card balances less than 50% of the available credit limit
If you cannot pay them down ask for a credit limit increase, but do not use it. It helps your credit profile when you are not over-utilizing revolving credit.
If you have limited credit depth
(i.e. you have not utilized consumer credit in the forms of credit cards, student loans,car loans, etc.), it is very important to establish credit and show a positive payment history.
If you cannot obtain a credit card or a loan due to insufficient credit history, it might be a good idea to have a parent or spouse to add you as an authorized user on one of their accounts. This might help your score and start getting credit in your name.
Want to have an ideal credit profile?
Start with a mortgage loan and round it out with at least one major installment loan (auto, boat, etc.), one smaller installment loan (student or personal loan) and three to four revolving accounts (keep balances under 50% of the credit limit and pay off every month ideally).
Maintaining this profile over time will give you the credit depth and payment history that creditors like the best!
It can certaily seem silly to get a credit card just to help your credit score but sadly you need to have credit in order to get credit, so you gotta start somewhere!
Banks will lend you hundreds of thousands dollars to buy a home if you can prove that you can pay any other kind of account.
So start small and work your way up!
Source provided by Unite Lending
