A 630 credit score for instance is on the cusp of being excellent instead of just good or fair. So the question is how do you improve that score in order to get better interest rates on homes, cars and even credit cards?
Your credit score is something will follow you the rest of your life. Everything you do to improve your score can save you 100’s and even thousands of dollars.
The first thing everyone should do is look at your credit bureau report from all three credit bureaus. If you find information on your report that is not accurate and is derogatory, by all means challenge it. Non accurate information is required to be removed if it cannot be verified.
The best way however, to improve your 630 score, is to pay your credit cards down to half the limit and try to keep them there. This alone can increase your score by 50 points or more. Do not close any accounts as this can potentially hurt your score. So keep inactive accounts open, perhaps by charging a small amount every month and paying it off. Some companies have resorted to closing accounts that are inactive and perceived to be costing them money just to maintain.
We all get credit cards offers in the mail and usually throw away the offer and go on our merry way until we receive the next offer. You can stop those offers from coming in the mail and even raise your credit score by doing so. This alone can raise your credit score within a few months.
Another way to make sure your credit score is raised is to watch your inquiries. Don’t apply for something you don’t need because the credit bureau inquiry has the potential to lower your score. The fewer inquiries you have for additional credit the better your score will be. So when you are buying something inquire if they will pull a credit bureau report and if they are think twice as to whether you really need it. For more information, visit Nerdwallet.
The idea is to raise your credit score into the 700s approaching what is considered excellent credit. Once you are in that area Home mortgage rates are better, auto loans have better rates and you now have leverage to lower those outrageous interest rates on your cards. Protect your credit and learn what affects your credit score and you will save thousands of dollars over the years.
Is 700 Score Magic on the Credit Scale?
There are 3 major credit bureaus. Experian, Equifax, and TransUnion. All of your credit information is reported on these every single month. From the on time payments that you had, when you first got your credit card, to the late payment on your car that you accidentally forgot to pay on time for that really hectic month. Everything is reported.
Now when you are being reported to the credit bureaus it generates a credit score. Credit scores range between 300 to 850. The higher the credit score the more respectable you are. It sounds like a game, and it really is, however it is a game that affects our lives. Let’s say, you don’t have bad credit, so anything below 600 is classed as you being a risk. You’re not perfect. You have had some late payments, some over the credit line fees, so you’re not in the 800 range.
Let’s say you have a 700 credit score. 700, is quite a respectable score to have. This way the creditors look at you of being a low risk person. You are still a risk, but not as high as some of the much lower credit scoring people of this world. If you have around a 700 credit score, you should comfortably be able to purchase a house, or a car, or anything that needs credit. Do you need another credit card? With a 700 credit score, there should not be a big problem to get a card with a worthwhile limit, and a fairly decent interest rate.
Now keep in mind, that although a lot of the things you do change your credit score, but a lot of the things that you don’t do affect it to. Yes, I’m talking about identity theft. This is what can destroy a credit score. Even if you have made your payments every month without fail. Someone could be opening up accounts in your name, and making purchases in your name.
One of the best ways to keep an eye on this is through a credit monitoring service. You can get one of these if you have any kind of credit card, just call them and ask them. Even if you don’t have a credit card, you can contact the credit bureaus themselves, and ask for 1 free credit report per year. That way, you can check to make sure all of the information on there is correct, and you can make sure you maintain a credit score as high as you can.