A low credit score increase your chances of getting turned down by the lenders and credit card companies. If you are having an average credit score, you will find many lenders will approve your loan but at a higher interest rate. To avoid paying high interest on your loan, you need to increase your credit score prior to applying. The following are 3 tips on how to increase your credit score from 680 – 700+.
You are entitled to receive a free credit report from each of the three credit bureaus every year. You can go to annualcreditreport.com to request a free credit report and print it out with your printer. After printing out the credit report, you can review it to see if there is any error information. When reviewing the credit report, you should check and see if there is any mistake record on late payment. You can submit the incorrect information on your credit report for dispute at the credit bureau.
If you have a lot of unpaid bills, you should focus on paying down them. Having a lot of unpaid debts means you have a high credit utilization ratio which can reduce your credit score. To pay your bills on time, you should set up a budget and be discipline to stick to the plan. You can have self control and live a frugal lifestyle so that you can meet the bill repayment deadline. Credit utilization accounts for 30% of your FICO score which means than you should not use more than 30% of the overall credit limit of your credit card.
If you can’t afford to pay down your balance, you can negotiate with the lender to reduce the outstanding balance. If you successfully negotiated with your lender, you must get it put down in a written agreement. Alternatively, you can persuade your creditor to increase your credit limit so that you have a lower credit utilization ratio.
Another way to raise your credit score is to get added as an authorized user on someone’s credit card. You can ask someone who has good money management skill to add you as an authorized user on the credit card. The account of the credit card which you are being added as an authorized user will show up on your credit report. So, if the person use the card responsibly and make on time payment every month to the card, you will be able to increase your credit score. There is no need to spend any money on the card to get a boost in your credit score. If you want to use the card to buy stuff, you can discuss with the person on how much you are allowed to spend.