Credit Score Counsel

You have to get out of your ego and into the mind of the creditors to be able to increase your credit score.

As you are reading every line in this article, the steps you need to take will become crystal clear.

So let’s look at what you can do to improve your credit rating and see if we can apply this lesson for a real life solution.

I think the number one problem with people who have low credit scores is excessive credit card use.  In other words, they are so focused on spending; they don’t take the necessary time to monitor the effect this is having on their credit scores.

You must obey one main rule when working on a plan to increase your credit score.

Eliminate or significantly reduce the amount of usage on your credit card.  It’s a basic credit repair truth that shouldn’t be violated anywhere. Yet it’s violated every day by consumers all over.

Let me explain.

My hunch is that you maintain high balances on your credit cards.

Take a quick peak at your credit card balances and any other revolving accounts.

The bad news is if the amount of money you owe on outstanding debts is more than 50 percent of the available limit, you will be getting no where fast on increasing your credit score.

The good news is IF you are able to reduce the amount you owe on those accounts and create balances that are low, your credit score could see a much-needed boost.

Think of it this way:  Outstanding debts make up 30 percent of a FICO credit score calculation.  THAT’s what creditors take into consideration when determining your credit worthiness.

Let’s look at another example that can help you increase your credit score.

Opening new accounts as a means of increasing your debt-to-credit ratio could backfire.  Don’t be fooled.  You see, additional inquires in your credit report in a short period of time can wreak havoc on your credit score.

Why?

Because studies show that six or more credit inquires equal to the possibility that you are eight times as likely to file for bankruptcy than someone who has three or less credit inquiries.

Which leads to the question: Should you close all of your credit accounts in order to help increase your credit score?

The answer is this: When you credit is poor, you should keep at least one credit card account open – for emergency purposes. And, by the way, closing an account will not remove it from your credit point.

But here’s the kicker – if that account has a zero balance, the effect could be your credit score.

All in all, the chance that you can increase your credit score is high to say the very least.  Limit your credit card spending and watch you score rise.

Keep a watchful eye on how often you use your credit cards.  Frankly, maintain low balances.

Have I got your attention?