The benefits of knowing how to raise Fico scores are so you can qualify for more loans and get the best interest rates available. That could save you thousands of dollars because lenders measure risk factors by your personal credit score.
If you want the best loan, you want your Fico score needs to be the best it can possibly be. Here are a few tips that will help improve your creditworthiness and raise Fico scores for you.
Get A Copy Of Your Credit Report
The first step to raise Fico scores is to get a copy of your credit report. Your report should have TransUnion, Experian and Equifax credit scores. The reason is if there is something on your report that is incorrect, your score will raise once it is removed.
Correcting credit report errors can take up to three months and sometimes longer. It's important to correct any errors before a lender sees your personal credit score so there won't be any question about you getting the best interest rates.
Pay Your Bills On Time
This may seem like a no-brainer but your payment history makes up 35% of your total personal credit score. Your recent payment history carries much more weight than what happened five years ago. Paying your bills on time is the best way to start rebuilding your credit rating and raise Fico scores for you.
Pay Down Your Credit Card Debt
Credit card debt and revolving charges determines 30% of your Fico score. High balances, or more precisely, balances that are close to your credit limit can negatively affect your personal credit score.
Lenders like to see a lot of room between the amount of debt on your credit cards and your total credit limits. Most lenders think around 30% to 40% of maximum is ideal. So the more debt you pay off, the wider that gap and the more you can raise Fico score.
Don't Close Old Credit Card Accounts
Closing old or paid off credit accounts lowers the total credit available to you and makes any balances you have appear larger in credit score calculations. Closing your oldest accounts shortens the length of your credit history and to a lender it lowers your creditworthiness.
Also don't open new accounts when applying for a new loan. Opening a new credit line may lower your score since you don't have a proven payment record yet. A new account also lowers the average age of your accounts which is another factor in determining your personal credit score.
If you want to qualify for more loans and get the best interest rates knowing how to raise Fico scores will give you the most options and save you the most money.
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