Wednesday, December 19, 2018

How to improve my credit score

Your credit score influences your ability to get loan from Lenders. Your past financial goof ups will bring down your credit score. Transunion, Equifax, Experian are the major credit reporting agencies. Lenders pay these agencies to get the customer’s credit report. They use FICO score and its between 300 and 850. Higher the better. 5 top factors that affect credit score are Payment history, Length of credit history, New credit and credit mix. 800-850 consider to be excellent. 740-799 consider to be Very Good. 670-739 is good, 580-669 is not good and below 580 considered to be poor. If you credit score is bad, you may not get the loan or you may end up paying a high interest rate or unfavorable terms and conditions. Here are few things to improve your credit score. Pay your bill on time. If you miss this multiple time in an year, your credit score will be significantly impacted. Even if you pay that later, it will help to improve your credit score. Incase you missed the due date by a day or two, call up your banker and request them to remove from the report. They may not be able to do it, but worth trying. Keep your balance low. Total balance should not exceed 25 or 30 percent of your credit limit at any given time. For instance, if your credit card has a credit limit of $1000, use only $250 or 300.Try to clear the payment before due date and make it zero. Pay your balances in Full. Don’t just make the minimum due. Don’t move your debt around. Don’t try to be smart by clearing one credit by taking from another. It will not help to increase your score. Make sure you check your credit score atleast once a year. Report the reporting agencies if any discrepancy. There is no magic to improve your credit score in a day or two.

What is credit score

Credit score is the most important financial information about an individual in United States. When you apply for a new Credit Card, Mortgage loan and Car Loan the lender will check your credit score determine financial behavior. Transunion, Equifax, Experian are the major credit reporting agencies. Lenders pay these agencies to get the customer’s credit report. They use FICO score and its between 300 and 850. Higher the better. 5 top factors that affect credit score are Payment history, Length of credit history, New credit and credit mix. 800-850 consider to be excellent. 740-799 consider to be Very Good. 670-739 is good, 580-669 is not good and below 580 considered to be poor.

What is credit limit and Credit Line or Line of Credit

It indicates the maximum limit of credit that a bank or other lender gives to a customer.