If you haven’t started playing the FICO game yet, a Pandora’s box of problems awaits you. If you’re ready, hit **start**, I’ve got 10 little-known cheats that will help you get to the next level. You only get one life, but 1mil’s 1ups are here to help you get the second chance you wish you had. Come and get it!
You think high school or college was the last you ever saw of report cards, and grades and scores!? Well my friend you were mistaken, there’s one monster of a score that follows you around for life — your credit score!
There is a wide variety of reports about you available to people you want to borrow money from, but the most largely adopted source is none other than Fair, Isaac & Co., (namesake of FICO) which developed the de facto credit scoring system used by some of the biggest lenders in the nation.
Companies like Equifax, Experian and TransUnion provide this information to financial institutions that deal with you and money to determine your creditworthiness.
Your creditworthiness determines what interest rate you’ll get for loans, or if you will be approved to rent an apartment. Maybe you’re starting to see how your FICO score can wreak havoc on your life! So now that you know the basics, let’s get to the reason why you came here:
10 Ways to 1-Up Your Credit Score
- Know and Track Your Credit Score- You can get the free MyFico 30-Day Trial of Score Watch which will tell you your current score and alert you if there are any changes.
- Never Miss a Payment, Starting Today- So you might not have had the best track record, but if you can keep your credit clean from now until forever your credit score will raise over time by itself! You can pay your bills online or use a direct deposit payment so that you never miss!(+100 pts)
- Never use more than 20% of your Available Credit- This is one of the lesser known tricks to credit score building. If you have a $1000 credit limit on one card, only use a maximum of $200 on it. This rule applies to every card you have.(+15 pts)
- Keep Credit Cards that Have No Annual Fees Open For as Long as Possible- The length of your credit history is a good indicator for your short term performance on paying a bill or loan. So, even if you’re trying to resist the temptation of using your cards, do not close them. Cutting them up is ok. (+25 pts)
- Extend Your Credit Limit on Cards You Already Have before You Get New Ones- This has to do with tip #3 there, it’s better to have more available credit on one card, then to have it spread around multiple cards. Besides, it’s just easier to keep track of, and it will help you not miss your bill cycle. (+10 pts)
- Get Credit Cards that Have CashBack Rewards to Contribute to your Balance- Get paid to use your credit card? Sort of.. With only 2 or 3% returns the trick here is that you have to use your credit card for most of your purchases. You’ll get a couple of hundred dollars back at the end of the year, and you can use it to pay off your debt, or to put away in a Money Market Account.(+5 pts)
- Transfer Your Balance to a Credit Card with a Lower Interest Rate and a Higher Available Credit- Not such a tricky maneuver but this one depends on you having another card with a lower interest rate. If you do, try tip #5 — up your available credit on your current lower interest rate card, then transfer the balance. (+10 pts)
- If You Think You Are Going to be FORCED to Pay a Bill Late Ask for an Extension or Payment Plan -Avoid getting a negative mark on your credit report, however possible. Beg, plead, make a deal. Once they bring out the smudger, your credit is smudged. Save yourself a major hit, negotiate new payment terms, refinance, — they really just want their money, but some credit places out there are dirty and tricky. Try try, and save yourself 15 points. Remember each hit is compounding negatively against your FICO points! This is a Plan B for those days where you forgot to follow trick #2(+15 pts)
- Take out a Small Personal Loan and Repay it Over a Year-Tricky, but it works. Take out a loan for say $1000 and pay the balance off over the course of the year. If you pay every month on time you will start to build a credit history. (+10 points)
Ask Someone With Good Credit if They will Account Shadow you- This a little tricky but it can do the job. Some credit cards allow you to add other people to your account without giving them an actual card. When your friend pays their bills on time it will reflect on your credit report, so will their available balance! But beware if they miss a payment or become delinquent, it will show up on your report as well. (+25 points)Fico scores no longer consider accounts that are shadowed! Looks like I need a new #10! =)
If you have any questions about your Credit Score feel free to contact me or leave a comment!
Or if you worried about your score changing you should try the Score Watch