5 Tips to Raise Your FICO Score
This video answers all of your credit score questions!! I'll start by telling you how to get your credit report and credit score for free, what are the credit score ranges, what goes into a credit score, how long does negative information stay on credit report, the difference between a Vantage score and FICO score, how to increase your credit score fast.
Don't forget to check out THIS VIDEO on how to pull and read your credit report.
TIP 1: Keep balances below 10% for a credit score over 800
I'm going to say something that you may not hear other places:
Keep your balances below 10% of what's available.
Many times you'll find advice that says keep it below 30 - 35%, but I will tell you that my credit score increased over 800 once I had my balances down below 10% of the available credit limit. (This is called utilization).
TIP 2: Pay on time
On time payments account for the heaviest weight on your credit report. If you are more than 30 days late, it goes on your credit report. The indicators on the credit report show for 30 days, 60 days, 90 days and 120 days. If you're that far behind, you're likely going to collections soon if not already. If you have one or two late payments (over 30 days), you can recover. Just remember that every month you pay on time will start to outweigh that past hiccup. Negative information, like late payments, will stay on your credit report for 7 years. (But good information can stay as long as 10 years, so Yay!)
TIP 3: Caution: Applying for new credit
When you ask for more credit, it does go on your credit report as a "hard inquiry" meaning you asked someone to pull your credit for a lending situation. These usually only drop your score a few points, but the more you try to ask for credit, it starts to add up. These stay on your credit report for 2 years.
Even if you aren't approved, your score will still take a hit. If you are approved, you can negatively impact the "average age of accounts". However, if you do get a new line of credit and don't use it, you can improve your credit utilization ratio positively (see Tip 1).
TIP 4: How closing accounts impacts your credit
Back to Tip 3 where I refer to the "average age of accounts", if you pay off credit cards then close them, that can impact the length of credit history. Different credit scoring models calculate scores and these factors differently, so it's hard to know exactly how it will impact your score if you close an account.
On the flipside, if you have any concerns about fraud, or your ability to avoid debt, by all means, close the accounts. Pro tip - they don't have to have a zero balance to close the account. You can close a credit card and still pay the balance after the fact.
TIP 5: Correct errors on credit report
One thing that could be dragging your score down is incorrect data! Always be watching your credit report for errors.
BONUS TIP! Increase your score by piggybacking off of someone else's credit as an Authorized User
You can be an authorized user on someone else's credit card accounts without have a credit card to use, and without being responsible for the bill. If the primary user is VERY diligent about paying their bills on time, you can get their good credit reported on your credit report which typically helps your score - even though you're not responsible for the payment of the account.
