Learning how to improve credit score ratings on your own is something that anyone can do.
Don't waste your money hiring expensive credit repair counselors.
Save your money and save your credit with a do-it-yourself approach.
Before you can improve your credit score, it is important to understand a little bit about how your credit rating is determined.
First, there are many different ways and companies that can provide creditors and lenders with a credit score.
Most banks, however, use what is known as the FICO score (after the Fair Isaac Corp.
score).
When people refer to your credit score, they are generally referring to your FICO rating.
It's important to note that the term can be used generically, so if you are paying to receive a copy of your score, make sure you are actually receiving a copy of your FICO score.
The FICO score takes a look at the items on your consumer credit report and calculates a number based on the information on that report.
Good credit behavior rewards you with more points, while a bad history or no history at all will take points away from your store.
Some items are worth more points than others.
As you are working to repair your credit you will want to primarily focus on the items that can have the greatest impact in the shortest amount of time.
What these items are will differ on your personal situation, but there are some universal thing that almost everyone can do to get a quick boost in their credit rating.
For instance, one of the bigger interests that the FICO score takes into consideration is your available credit to debt ratio.
This is the amount of outstanding debt you have in relation to the amount of credit that has been extended to you.
For example, if you have a credit card with a $10,000 limit and have a $5,000 balance, you are have a 50% available credit to debt ratio.
Lenders like to see a low credit to debt ratio because it shows them that you are responsible with money and can manage debt well.
Those who have a high ratio are more likely to over-extend themselves and statistically have a greater chance of being unable to repay their debts.
The obvious way to improve this ratio is to pay down your balances, but chances are if you are worrying about your credit score that means you need all the money you have to apply for a mortgage or new auto loan.
In that case, the next best thing to do is to simply get more credit extended to you.
If you call your credit card company and ask them to increase that $10,000 limit to $15,000, you'll instantly improve your credit rating.
There are some techniques to always get your credit card provider to agree to do this, but before you take this step you must promise yourself that you will not use that available credit.
Otherwise you'll just end up right back where you started, but this time with more debt to repay.
Don't waste your money hiring expensive credit repair counselors.
Save your money and save your credit with a do-it-yourself approach.
Before you can improve your credit score, it is important to understand a little bit about how your credit rating is determined.
First, there are many different ways and companies that can provide creditors and lenders with a credit score.
Most banks, however, use what is known as the FICO score (after the Fair Isaac Corp.
score).
When people refer to your credit score, they are generally referring to your FICO rating.
It's important to note that the term can be used generically, so if you are paying to receive a copy of your score, make sure you are actually receiving a copy of your FICO score.
The FICO score takes a look at the items on your consumer credit report and calculates a number based on the information on that report.
Good credit behavior rewards you with more points, while a bad history or no history at all will take points away from your store.
Some items are worth more points than others.
As you are working to repair your credit you will want to primarily focus on the items that can have the greatest impact in the shortest amount of time.
What these items are will differ on your personal situation, but there are some universal thing that almost everyone can do to get a quick boost in their credit rating.
For instance, one of the bigger interests that the FICO score takes into consideration is your available credit to debt ratio.
This is the amount of outstanding debt you have in relation to the amount of credit that has been extended to you.
For example, if you have a credit card with a $10,000 limit and have a $5,000 balance, you are have a 50% available credit to debt ratio.
Lenders like to see a low credit to debt ratio because it shows them that you are responsible with money and can manage debt well.
Those who have a high ratio are more likely to over-extend themselves and statistically have a greater chance of being unable to repay their debts.
The obvious way to improve this ratio is to pay down your balances, but chances are if you are worrying about your credit score that means you need all the money you have to apply for a mortgage or new auto loan.
In that case, the next best thing to do is to simply get more credit extended to you.
If you call your credit card company and ask them to increase that $10,000 limit to $15,000, you'll instantly improve your credit rating.
There are some techniques to always get your credit card provider to agree to do this, but before you take this step you must promise yourself that you will not use that available credit.
Otherwise you'll just end up right back where you started, but this time with more debt to repay.
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