10 WAYS TO INCREASE YOUR CREDIT SCORE!

1. This probably goes without saying, but I’m going to say it anyway: Pay your bills on time. 35% of your fico score is based on your payment history.

2. Keep your credit card balances to 30% or less of your credit limit per card. For example, if your credit limit on a card is $1000, you want your balance to be no more then $300.00. If you have several cards, spread your balances around, even doing balance transfers if necessary so that your balance doesn’t exceed this on any one card.

3. If you open a new account, use it and pay it on time for 3 months and you will gain between 5 and 10 points. Use it and pay it on time for an additional 3 months after that and gain another 5 to 10 points. So don’t open an account and then not use it, especially since your score drops a little when you open a new account.

4. If you have a mortgage and money is tight, don’t pay the mortgage late! Pay utilities late if you have to since they don’t report on credit, but pay your mortgage on time. Late mortgage payments hit your score hard.

5. Pay all your bills 10 days early one month and your score will go up about 10 points. This only works once, but you don’t lose the points if you pay normally the next month.

6. If you “opt out” of receiving pre-approved credit card offers, you will increase your score about 10 points. Go to www.optoutprescreen.com and fill in the required information. You will not receive those pre-approved credit offers for five years. You can opt back in at any time and your score does not drop as a result. If you want to opt out permanently, there is a form online that you must sign and mail in.

7. Capital One does not report the credit limit for their cards. They report the limit as being the same as your balance, which, as you learned from #2 above, hurts your score. If your balance is less then the limit, ask them for a letter stating what your limit is and send it to the bureaus that are reporting it and request that it be on your credit report.

8. There is a process your mortgage professional can do for you called a rescore. If you have certain inaccurate derogatory information, or have paid off some credit cards, they can go through their credit reporting agency and have it corrected and your score re-calculated. The reporting agency does charge for this, but it can make the difference between qualifying for a loan program or not.

9. Call your credit card companies and request an increase in your credit limit. Remember that your balance should be 30% or less of your limit? Well, if your limit is very small, it’s hard to keep to that rule of thumb. Increase your limits and don’t use the additional credit.

10. If you are shopping for a mortgage, shop within a 14 day period, if possible. Numerous credit pulls done for the purpose of a mortgage loan will only count as 1 inquiry as long as they are all done in a 14 day period. This is also true of car loan inquiries. BUT, if you are shopping for a mortgage loan, don’t also get your credit pulled for a car loan within that 14 day period or it will break the cycle and all the inquiries will count against you. One inquiry drops your score about 3 points, so times that by several, and you have a significant hit to your score. The same is true if you are car shopping and you do a mortgage loan inquiry within the same 14 day cycle—all those car loan inquiries will then count against you.