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credit score. This could be one of those touchy subjects, depending on how you look at it. It can take years to build your score and only months to destroy it. We are all victims of credit crashes; From missing a payment to using up your entire credit. Sometimes, a bad score can be the result of something out of our control—divorce, medical bills, and bankruptcy. Simply put, maintaining your credit is a way of life. Since almost all major purchases require credit, a low score will make everything more expensive. You will have to pay a higher interest rate on the loan over time.
A score is used to show credit history, timely payments, responsibility and discipline. A low credit score will naturally improve over time, so don’t lose sleep over it. However, if you have upcoming equipment financing or leasing needs in the near future. It would be wise to try to increase your score beforehand. This could be the deciding factor between promoting you to the next grade and saving money.
Let’s be realistic. There is no miracle way to increase your credit score by 100 points in a month. Some credit repair “experts” will try to convince you that it can be done, but it is absolutely impossible. You hear it all the time in the commercials – “1-2% APR for excellent credit”, but you’re never quite sure what excellent credit really is. Let’s break it down, there are 4 levels of credit.
Tier 1 (Excellent Credit): 700 and above
Tier 2 (Good Credit): 660-699
Tier 3 (Fair Credit): 620-659
Tier 4 (Bad Credit): 619 and below
credit score
Tier 1 and 2 usually get the best rates. Tier 4 is generally the most difficult to get approval for. Even if you have a Tier 3 score, it is still advised to try and improve your score. It is an important part of your life and business. Getting financing can be tough if you’re a new business without a cashflow statement. Many lenders will use your score to evaluate you. That’s why it’s important to improve your credit score while you can.
Here are our 4 best hacks to improve your credit score quickly. The improvement can be anywhere between 10 points to 40 points which should be enough to boost your credit score. Note: These are quick tips to raise your score, we’ll have a more comprehensive guide to maintaining your credit later.
Negative Marks Controversy – We get it. Sometimes it’s hard to pay your bills on time. Between juggling your business and family, paying your bills can sometimes slip your mind. There are 3 major credit reporting bureaus: TransUnion, Equifax, and Experian. With all of them your credit report will be slightly different. Contact them and dispute whatever you can. Write down as much as possible with your dispute and make copies of everything.
Note: Put in the time and be thorough – this can have a huge impact on your score.
Open a new secured credit card – According to Credit Karma: People with a credit score of 800 and above typically have 7 open credit cards. While you don’t want to lose more than 1 in a year, 7 is just a guideline number to aim for. No matter how bad your credit score is, you can still get approved for a secured credit card. Secured credit cards are the best way to rebuild your credit. You’ll have to put down a deposit, but the lender will give you a line of credit. To choose a good secured credit card to use, we’ll be using this guide by Magnify Money.
Note: You want to keep your credit utilization under 30% utilization, so monitor your utilization accordingly. Open only 1 credit card as doing more can hurt your score.
Increase your credit limits – Call your existing card companies and ask to increase your limits. If you are not at 100% credit utilization, it would be helpful to increase your limits. Even if it’s just a 10% increase, it will help your overall report health.
Become an authorized user – This is a bit hard to do. You will need someone who has good credit. They will link you to their existing credit card accounts. You will be provided with a card linked to their account and will be responsible for the charges incurred. The people you ask will be family members and close friends. Obviously, persuading someone to join you will be difficult, so don’t take it personally. Becoming an authorized user can increase the score by up to 50 points!
Tip: Don’t use the card when you’re paired. Cut it out so you don’t have any temptation.
Taking advantage of your credit is key to getting the most out of your money. Hopefully with these 4 hacks, you will get the score improvement that you need. General advice applies, don’t spend more than your newly increased credit limit and pay your bills on time! Many people have had success using the autopay feature to eliminate late payments. Feel free to contact us and let us know how it worked for you!
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