How To Boost Your Credit Score Fast
Your credit score is a three digit number use by lenders to gauge your creditworthiness when you apply for a mortgage, credit card, auto loan or any other line of credit.
Since different lenders use different scoring formulas either based on the FICO model or the VantageScore model, you would expect your credit score varies from lender to lender. Usually a higher score makes it easier for you to qualify for a loan and may result in a better interest rate.
However, the outcome of the credit score are largely influenced by these six components namely,
2) Percent of On-Time Payments - High Impact
3) Number of Derogatory Marks - High Impact
4) Age of Open Credit Lines - Medium Impact
5) Total Number of Accounts - Low Impact
6) Total Hard Credit Inquiries - Low Impact
Two of top components carry big impact and the other components are of lesser importance.
Learn to understand them and utilize them to their potential can really boost up your credit score almost overnight.
The one component we should put more effort and scrutiny is the Credit Card Utilization. It accounts for about 30% of your overall credit score and is the second most crucial component behind the On-Time Payments.
Your credit card utilization rate is your available credit compared with how much you're using at any given time. It can be calculated by taking your credit card balances and dividing that number by your credit card limits.
The resulting percentage is your utilization rate. Unlike credit score, the lower the credit utitization is the better is for you preferably below 10%. Lender generally likes to see that you are not using too much of your available credit.
Michael Mack, an attorney and credit card expert who started a foundation called BankFound.org.
Credit card utilization is not calculated on the remaining balance you carry over month to month. It is calculated using the balance you have when your credit issuer reports to the credit bureau. Therefore it is a smart move to pay off your balance every month thus satisfying the first component- the On-Time Payments.
Focusing on these two components is the fastest way to add points to your score unlike the other remaining components which takes more time to accomplished your objective. You could expect seeing your credit score shoots up 30, 40, 50 points or more within a month ( 30 days) if you keep up with the effort.
Important Tip: If you're in good standing with your lender, consider asking for a credit limit increase on one of your credit cards. This could help you keep your utilization rate lower and achieve your goals faster.
Free Credit Consultation - Includes Credit Report Summary & Score
Next: Does Credit Repair Really Work?
Please Leave Comments...