Easy Tips to Help Raise Your Credit Score

Even if you don't have a credit card, you probably encountered the fact that having a good credit score is necessary to avail of credit services. It's a crucial part of your overall financial picture. So, what exactly is credit score and how does it matter? Let's see.

What is a credit score?

Credit score is simply a number that reflects your history of credit services and allows banks, credit card companies, etc. to determine what kind of a borrower you are. In the simplest terms, a person with lower credit score will be considered a risk, whereas one with a higher credit score will be considered safe. It is simple, but how credit score is counted isn't exactly that simple. The following things are considered in your credit score.

• Payment history. Whether you pay your credit balances on time. This is the major factor.

• Credit utilization. How much of your total credit limit you use. Using lower than 30% of your total limit is safe.

• The duration of your credit history. The older it is, the more trustworthy you will be considered (given that you usually pay off on time).

• Credit mix. If you have a mix of credit services, adding a new element is an advantage, given that you can keep paying everything on time.

• New credit. New credit accounts also count a in the credit score. However, only about 10% of it. Starting multiple new credits in a short span of time can damage your score.

What is considered a good score?

Credit scores are calculated by analytics companies such as FICO and VantageScore. These are the ones issuers refer to for your credit card or loans. Both of them have a range of 300-850 but good credit is classified differently for them and certainly, the algorithms might be different as well.

FICO

300 to 579 : Very poor

580 to 669 : Fair

670 to 739 : Good

740 to 799 : Very good

800 to 850 : Exceptional

VantageScore

300 to 549 : Very poor

550 to 649 : Poor

650 to 699 : Fair

700 to 749 : Good

750 to 850 : Excellent

How raising your credit score helps you

Having a higher credit score opens many options for you. You can avail better loans with more credit limit, get better credit cards, the interest rates are lower, etc. People with really good credit score can also be eligible for 0% interest credit cards. If your credit score has been damaged, you can use online services of reputable companies such as Velocifin | top rated credit repair & business funding company, which helps repair your credit score. They can also get you eligibility for 0% interest credit cards and home loans, and it consistently helps you improve your score. Other than that, let's see some easy tips to raise your credit score.

Tips to raise your credit score

Pay the bills on time

As you can see above in the factors that account for your credit score, payments are a major factor. As much as 35% of your total credit score is calculated based on whether or not you make timely payments. Naturally, this is where you start raising your credit score. Pay off all the bills on time every month.

Set reminders

Now, this might seem obvious but it happens. Many people don't pay their bills on time just because they forget. Setting up reminders is the least you can do. Write your credit card bills, loan repayments, etc. in your calendar, planner, set reminders on your phone, set up email reminders; whatever works for you. Just make sure you don't miss your due date. There are certain apps or services that allow you to set up autopay for your payments. You can make use of such services, given that they are secure.

Keep your credit utilization in control

As the utilization accounts for as much as one-third of your total credit score, you should keep it in check if you want to raise your score. Generally, people who have low utilization have good credit scores. Using less than 30% of your credit limit is a safe amount and it can be an adding factor to raise your credit score. If you have multiple credit cards, you can use both in such a way that the usage is less than 30% for both. You can also try paying off the balances more than once per billing cycle, if you can afford.

Don't apply for too many credit services at once

The number of credit enquiries you make can also affect your credit score. Only apply if for a new loan or credit card if you need it. Credit enquiries such as financial products, request for increasing credit limits, number of credit account openings, etc. count affect your credit score. If you want a new service and are unsure of qualification, you can apply for pre-qualification provided by various companion. Pre-qualification won't count in your credit score and so it is a safe option.

Request and review your credit report

You can get one free credit report from each credit bureau per year. Make use of that free report and request one. Review it and see if there are any mistakes or errors. If you find any, notify the credit bureaus and get them checked. There are chances of errors in your report and checking them will make sure your credit score isn't unnecessarily affected.

Have a good credit mix

As mentioned above, your credit mix is also a factor affecting your overall score. If you only use one credit service such as just a loan or just a credit card, try applying for another. Make sure you will use it properly and make payments on time before you do so. Having a good credit mix can definitely help raise your credit score.

Seek help from online services such as Velocifin to improve your credit score. They give you a free analysis and if you use their service, they can help dispute any mistakes in your credit report, repair and improve your score, and make you eligible for better loans and 0% interest rate credit cards.

Following these credit card habits can help you improve your credit score consistently over time.