How to quickly increase your credit rating - ForumDaily
The article has been automatically translated into English by Google Translate from Russian and has not been edited.
Переклад цього матеріалу українською мовою з російської було автоматично здійснено сервісом Google Translate, без подальшого редагування тексту.
Bu məqalə Google Translate servisi vasitəsi ilə avtomatik olaraq rus dilindən azərbaycan dilinə tərcümə olunmuşdur. Bundan sonra mətn redaktə edilməmişdir.

How to quickly increase your credit rating

Your credit score has a big impact on your finances—especially the amount of credit available to you. Your credit score scores are reviewed by lenders of all types, including credit cards, mortgage companies, car loans, and more.

Фото: Depositphotos

Your credit score is not a static number and changes frequently based on your financial behavior. Late or missed credit card payments and late payments on other loans negatively impact your score. But this also works in the opposite direction - you can take active steps to improve your credit score, and you can score a few extra points quite quickly, writes GO Banking Rates.

1. Get a free credit report

You can request a free credit report from three agencies: Experian, TransUnion and Equifax. Your rating is based on factors such as credit history, payment history, credit inquiries, and more.

Each agency determines your rating in its own way, so review the reports from each of them and correct any errors that may be made there by sending a letter and documentation of the error to credit agencies.

2. Know how your credit rating is calculated

You need to know exactly what your credit rating means and how it is compiled so that you can take steps to improve it.

“Payment history makes up about 35% of your score. Increase the length of your credit history. This accounts for about 15% of the overall credit score,” explained Carrie Schwab-Pomerantz, a certified financial planner at Charles Schwab.

She advises a simple solution for increasing your credit rating: keep your credit card balance low.

“Ideally, you should keep your loan amount below 25% of your available credit limit. This accounts for about 30% of your credit score. Minimize the frequency of requests for new cards. This is 10% of your bill. Maintain a combination of different types of debt—car loans, mortgages, credit cards. This makes up the remaining 10% of the rating,” the expert explained.

3. Improve your debt to income ratio

The next step to improve your credit rating is to improve your debt to income ratio. You can improve your DTI by calling the company that serves your credit card with a request to increase your credit limit or simply by paying off part of the card debt. Your credit card debt should not exceed 30% of your credit limit if you want to improve your credit rating.

4. Keep your credit information up to date.

Another good credit rating strategy is to inform credit card companies of any increase in your income. According to lenders, a higher income improves your ability to make timely payments. Informing your lenders about your higher income will allow them to increase your credit limit, which, in turn, increases the amount of credit available to you and has a positive effect on your credit rating.

5. Do not close old credit accounts.

Don't close old credit accounts—even ones you haven't used in a while. Closing these accounts reduces the credit limit available to you as shown on your credit report and reduces the length of your credit history, which in turn can lower your score.

6. Make payments on time

If your payment history shows that you made loan payments on time, but you made one payment late, ask the lender to remove this incident from your credit report in order to maintain a good credit rating, since timeliness of payments is an important part of the credit rating.

7. Keep track of your credit report.

You should regularly monitor your credit report to ensure its accuracy.

If you regularly monitor your credit report, keep track of what dates your creditors actually report about your balance sheet. This is especially important for people seeking to quickly increase their credit rating. If the lender has already reported a monthly balance, the borrower may want to focus on improving the other balance in order to gain additional credit history points.

8. Keep your credit balance low

"A powerful and almost secret trick to improving your credit score is to keep your balance at zero," said Natasha Rachel Smith, personal finance and credit card expert at TopCashback.

“If you get paid once a week or twice a month, pay off your credit card balance when you receive your paycheck. For new credit card users with low spending limits, it's easy to exceed the recommended 30 percent to maintain a good or excellent credit score without even realizing it.

9. Use balance transfers

Banks and credit card companies are constantly trying to attract new customers by offering a zero-interest rate on balance transfers for new customers.

One way to quickly increase your credit rating is to use balance transfers to make sure that all your credit card balances are less than 30% of their credit limits.

10. Make highly efficient payments

Not all debts have the same impact on your credit score. Paying down certain debts earlier than others can give you a significant boost to your credit score—even if your total debt remains the same.

For example, paying 20 000 dollars with credit card debt can increase your rating by 100 points, while paying the same amount of student loans or mortgage loans is unlikely to affect your credit rating.

In general, revolving debt and some forms of unsecured debt are more significant for a credit rating than secured debt. Thus, prioritizing credit card and personal loan payments is a good strategy for improving your credit rating.

11. Become someone else's authorized user.

Find a relative or friend with a good credit rating who wants you to become an authorized user of his card. After authorization, his account will be displayed in your credit report. That is, in essence, you will “inherit” the credit history of this account. Keep in mind that this person should have a good payment history and an excellent balance so that it has a positive effect on your credit rating.

12. Get both types of credit

To have a good credit rating, you need to have both installment loans and a revolving credit card. An installment loan is repaid over a period of time and you can no longer access the money you put down on that loan. A revolving loan is any loan that will be available to you again after you repay it.

Read also on ForumDaily:

9 cases when you should not use a debit card

6 financial crimes you may accidentally commit

8 simple habits that will help you earn more in 2019 year

credit rating Educational program
Subscribe to ForumDaily on Google News

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis. 

1085 requests in 1,058 seconds.