Bill Consolidation Resources
Unusual ways which may help you increase your credit score
Maintaining a good credit score is essential for anyone who wants to buy a home, car, or work at a professional job. Very few people understand what factors can affect their credit score, however, much less how they can improve a credit score that has already been damaged.
The typical advice given to most people who want to improve their credit score is to pay their bills on time. While this can improve a credit score, there are plenty of other ways to increase a score. The easiest way to improve a credit score is to increase the ration of the amount of credit extended to the amount owed. To do this, a consumer should ask for the credit limit on any credit cards he or she holds to be increased. Since about 30% of a credit score is dependent on this ratio, doubling a credit limit can increase a credit score by about thirty or more points in some cases.
Before getting started on the next steps, however, a consumer should get a copy of his or her credit report. Review this report for any errors. Because it has been estimated that four fifths of credit reports have mistakes in them, challenging a mistake and getting it removed from a report can improve a credit score by up to 100 points.
Next, take a look at the cards that haven’t been used in a while. Rather than close these credit accounts, keep them open. While many people think that having fewer accounts open, in actuality, closing these old accounts can shorten the length of a consumer’s credit history. Therefore, closing accounts can actually decrease a credit score. A bill consolidation company can help a consumer determine which of their credit cards to pay off first.
Next, a consumer should try to put any utility bills under his or her name that they can. Of course, he or she should be sure to pay these bills on time. Payment history comprises about 10% of a consumer’s total credit score. While it can cost some money to switch a utility account to another person, being able to show a history of timely payments on recurring bills is important to improving a credit score.
One of the strangest suggestions to many people is to simply do nothing at all. Rather than go through a lot of steps to improve a consumer’s credit. Many people are surprised to learn that over time, credit scores will improve on their own. This is because mistakes will hurt a credit score less as the time since the mistake was made gets longer. For example, if a credit score is low because of a few missed payments, the average consumer will need to wait about half a year before seeing his or her credit score improve. While waiting, if a consumer works on paying down his or her debt, his or her credit score could improve even more.
Of course, there are a several commonly held beliefs of ways to improve a credit score that are not true. A common belief is that becoming an authorized user on the credit card of someone with good credit will let a consumer essentially “share” the good credit score. In fact, the new credit reporting laws which were passed in 2007, made this method of improving a credit score ineffective.
There is also a commonly held belief that a good way to improve a credit score is to take out a small loan and pay it off over time. While this can improve a score slightly by showing a good payment history, it is a very expensive way to build a good score. Try the other suggestions listed instead.
