You may have been young and less responsible than today. Or there was an accident or illness that damaged your credit. At this point it doesn’t matter. Your FICO number, whether it’s 685, 615, or 550 is getting in the way of being able to do any number of things. Jobs are harder to get, major purchases are harder to accomplish, even insurance coverage for a reasonable price is difficult to attain if your credit score is too low.
You have been told that time is the best deodorant for a bad FICO. But do you really have to wait seven years and then hope that the bad stuff has fallen off?
Your credit report can be singing a happier tune well inside the seven year mark, and the music begins in as little as 60 days.
Pay Down Your Credit Card Balance: Your credit score is impacted any month in which you carry a balance more than 10% of your available credit. Keeping a balance between five and ten percent of available credit will result in a FICO uptick of as many as 20 points in just two months.
Release Nuisance Balances: The average American consumer has five credit cards. Don’t throw any of them away, but pick two to use and pay off that little balance that the others carry. That way, you’re not polluting your credit report with a lot of balances.
Cherish Good Debt: Some folks erroneously believe that a good way to improve their FICO score is to ask to have paid in full and paid on time debt removed from their report. It can be done, but it shouldn’t be done. Good debt is like the “A” that you got in high school trigonometry, if you were so fortunate. You may never use it again but it sits there looking mighty handsome.
Do All of Your Credit Inquiry in the Same Month: Credit reporting agencies have software that tracks the number of times that you ask for credit. Repeat requests, over time, make it appear that no one will loan money to you, but that you keep asking. The good news is, credit inquiries made within 45 days generally count as one inquiry. So don’t troll in the credit waters. Ask for what you need and get out.
Where You Charge Matters as Much as How Much You Charge: Your Mom was right. You are known by the company you keep. Credit bureaus know if you are using your card at places such as pawn shops, racetracks and divorce attorneys. A cash advance, even to your checking account, can hurt your credit score as well. It is a sign of stress. The FICO likes you cool and composed.
These tips, small as they may seem, can improve your scores, and improve your life.