Bad credit or non-existent credit?
I think we have all been there at some point in our life, so I have put together a list of ways that you can build your credit score so when applying for a mortgage you are not blind sided by your credit score.
1. Dispute Errors. Mistakes happen but you can dispute errors online though Equifax or TransUnion. After disputing any errors comes step 2…
2. Negotiate. You can’t try to deny that you stopped paying a bill such as a credit card for whatever reason it might have been but you can ask to have creditors erase that debt or any collection debt from your credit bureau. Often writing a letter offering to pay what your owe the creditor will then report the account as paid as agreed or in some instances remove it altogether. The other option is asking for a good will adjustment, write a letter to the lender in which the balance is. remaining unpaid and emphasize your previous good history and ask that the faults may be removed from your credit bureau.
3. Check your limits. Always make sure your credit limits are current vs. Lower than they actually are, looking like you max them out each month is not what you want. Always ask your credit issuer to mention your newly bumped up limit if they have forgotten.
4. Actually Get A Credit Card. Having a credit card or to will do more good for your credit score than you may think. That being said paying them and not charging too much on them is vital, be a responsible credit card owner otherwise you will have more trouble with your credit score. With that being said…
5. Under-use Your Credit Cards. Yes Yes I know I just told you to go get a credit card but that being said you need to be a responsible credit card owner. Don’t pull the card out and pay for absolutely everything. Your should have NO MORE than 30% of your total limit used on the card each month, a 10% utilization would be even more ideal to maximize part of your FICO score.
6. Raise Your Credit Limit. Ask for a credit limit increase, example increase your VISA or MC from $1000 limit to $3000 limit but be careful though. It only works if you can trust yourself not to increase your spending habits, because if you do you will be back at using 66% or more of your credit limit each month which ultimately defeats the purpose of the increase.
7. Don’t Ever Close ANY Cards. Cancelling or closing any credit cards will cause your available credit limit to drop which doesn’t look good when pulling your credit bureau. If you need a use for a credit card you feel you have no use for one idea is to make a reoccurring bill payment occur on that card such as a utility bill or a cellphone bill, make it one that will for surely be paid in full every month.
8. Mix It Up. Using all kinds of credit can have greater impact and boost your score more. Examples of other credit is a small personal loan such as a line of credit or buying furniture or a car on an instalment loan but only do these things if you can for surely meet the amount of each payment on the scheduled time.
9. Pay Your Bills ON TIME. SERIOUSLY THIS IS THE MOST IMPORTANT ONE OF ALL. Your payment history including all late or skipped payments show up and make up for over 35% of your FICO score. If you have trouble remembering to pay your credit cards or loans have them set to automatic payments that are withdrawn on a specific day of the month out of one of your accounts. AN even better option is to pay your credit cards or loans if they don’t have a scheduled time to pay them is twice a month and even make this automatic if you can that way no payments are missed or late.
Hopefully these 9 ways to build your credit will get you started in the right direction to build that credit score of yours! If you have any questions feel free to contact us and we will set you up with one of our trust financial experts.
Thanks for reading!