What Is A Good Credit Score and How to Get It?
A “Good” credit score is generally considered to be in the 670 to 739 range. At this level, you have access to conventional home loans and car loans; you can secure relatively low rates on credit cards and personal loans. It’s not perfect, but it’s close, and if you’ve ever had a subprime or “poor” credit score, you’ll know just how much easier life can be when you’re in this range.
That begs the question—how can you get a good credit score? What is needed for you to make the jump from those subprime scores to something that creditors can’t resist?
1. Get Help
Millions of Americans avoid checking their credit reports because they’re worried about what they will find. Whether they have mounting debts, late payments, or lots of new accounts, they see that their credit reports are suffering, and they panic.
It helps, therefore, to have someone on your side, someone who can fight your battles and provide you with support when you need it.
That’s where Finance Council comes in.
Finance Council is a credit referral company that provides free phone consultations to creditors with low scores and growing debts. Its goal is to connect these consumers to one of its trusted partners, ensuring they find the best solution to whatever issue they have.
Following a single phone call, their advisors will point you in the right direction and help you find a company that can drastically improve your credit score, making it easier to get approved for loans, buy the house of your dreams, and get better rates on new credit card applications.
2. Think About Credit Utilization
When trying to improve your credit score, one of your first instincts is to reduce your limits, cancel your credit cards, and limit the amount of credit that’s available to you.
But this will do more harm than good.
30% of your credit score is calculated based on something known as credit utilization, which compares the amount of credit you have at your disposal to the amount that you have used.
Imagine that you have two credit cards, both with $10.000 debts and $10.000 limits. At this point, you’re using 100% of your credit, so this aspect of your score will suffer.
If you clear one of those cards, you’ll have $10.000 in total debt and $20.000 in credit, so your credit utilization will drop to 50%. But if you proceed to cancel that credit card, you’ll now have $10.000 in debt and just $10.000 in credit, so your ratio will jump to 100% again.
Clear as much of your debt as possible, never cancel unused credit cards (unless you’re paying a hefty annual fee) and look to increase and not decrease your credit limits.
3. Don’t Open Unnecessary Accounts
If an improved credit limit boosts your score, then a new credit card makes sense, right?
Every time you apply for a new credit account, something known as a hard inquiry is added to your credit report, and this reduces your score by anywhere from 5 to 15 points. In addition, part of your score is calculated based on whether you have any new accounts and on the total age of your accounts, both of which will be adversely impacted by a new credit card.
Try to avoid applying for and opening any unnecessary credit accounts, including credit cards, personal loans, car loans, and finance programs.
4. Pay on Time
Making your payments on time is essential if you want to maintain a strong credit score. Unlike the credit utilization tricks mentioned above, it won’t produce instant results, but if you miss a single payment, your score will take a hit and undo all of your hard work.
By making your payments on time, your payment history will gradually improve, and this is key, as it counts for 35% of your total score. In addition, it improves the average age of your existing accounts, which also impacts your score.
5. Remove Inaccuracies from your Account
Last but not least, you should check your credit report at least every few months. If you notice any inaccuracies, any accounts that shouldn’t be there, you can dispute them. Removing one of these accounts could add dozens of points to your credit score.
Of course, the actual process of removing unwanted items isn’t as easy as it should be, but that’s something that Finance Council’s trusted credit partners can also help with. One of the first things they do is check for items that shouldn’t be there and find ways to remove them.
Once that’s finished, they’ll shift their focus to other aspects of your credit report, making significant changes and putting you on course to achieve that elusive “Good” credit score rating. And if you continue following their advice, you could advance even further than that, joining just 20% of Americans who have “Exceptional” credit.
Questions? Call 1 (888) 479-1474