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A New Way To Build Up Your Credit Score

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When you have low credit score or many negative items affecting your credit report, then you know how hard it can be for you to get approved for a loan or any other type of credit line. If you apply while having bad credit you will probably be rejected and your credit history will be checked which means a new inquiry added that will also lower your credit score and make the matter worse than it was to begin with.

Nowadays—in this competitive market for lenders—to build up your credit score you need to make quick and accurate decisions when you find a lender to grant you a loan or credit scoring. Remember that your credit score is very important, as it is the numerical value assigned to your credit history and credit report to be seen by lenders and financial institutions before making decisions or negotiating with you.

 

The facts for building up your credit score

 

Having a higher credit score means you’re more likely to be awarded a higher line of credit at a lower interest rate, which will help you keep your credit score high in the long run.

 

There is no doubt that high credit scores mean better and lower interest rates. On the contrary, low credit scores mean higher interest rates on the loan or line of credit if you get approved in the first place.

 

Having a bad credit score is not the end of the world—many lenders have options and offers for people with bad credit who may be able to borrow money with regular interest rates to stay with their business, which can be a great way to start building up your credit score.

 

What happens when you have no credit history?

 

If you have no credit history that means there is no credit score at all, do you think you can get a loan? The answer is no, you can not apply or get approved for a loan. You must create a credit score first.

 

There are a few things you can do to build your credit score if you need a loan but have no credit history. For example, you consider a guarantor loan, this is a loan based on someone guaranteeing the loan, which can be a great way to start building your credit score.

 

Create your credit score

At some point in your financial life, you will need an active credit—such a loan or a credit card in order to get a new credit card, cell phone plan or even a home. This means that lenders want to see you regularly working on your credit to maintain a good score, showing steady financial responsibility.

There are more things than you may think that are based on a credit scoring evaluation—building up your credit score doesn’t mean you have to be in debt, you can save money instead.

You can start with a credit card if you are trying to build up your credit score or bump it up, look no further than your own wallet. Most part of your credit is based on how you manage debts, bill payments and other credit obligations.

When you have credit cards and you manage them properly, they become a powerful tool for proving your ability to handle debt. Always avoid misusing credit cards because it can get you in trouble with your credit report.

Start with the best credit card you can qualify for

 

A way to build credit faster is by paying off unsecured credit cards in full each month But in case you don’t qualify for one, you can start with a secured card. The main difference between secured and unsecured credit cards is that you are required to back secured cards with a deposit in cash that equates to your credit limit.

There are some credit card companies or issuers that send your FICO score with your monthly statement in order to have your progress tracked. It is very important you pay your credit card bills on time, remember your payment history affects about 35% of your FICO score when it is reported in your credit report.

Recommendations to manage your credit 

Making timely and consistent payments is the best you can do to build up your credit score. To maintain a good credit score you can recur for auto-paying bills or setting reminders for a few days before the day of payment.

Avoiding collections is a great strategy because once a debt goes to a collection agency, as any other negative item on your credit report, it will remain on your credit score as a derogatory mark for up to seven years. Each derogatory mark can bring your credit score down significantly, making it feel impossible to get back up on your feet financially.

Maintaining a low balance is good for your credit. Your credit card is a form of revolving debt which can cause damage in your credit score if you don’t establish a good payment history. You don’t have to pay your balance in full each month but try to keep it as low as possible so it will make your FICO score go up a little more. Your credit card balance can make up almost 30% of your FICO score.

You should be careful when you think about canceling credit cards, owing the same amount in your open accounts may lower your credit score.  If you are not paying high fees, try to keep your unused accounts with credit cards opened.

Your older accounts are very important because they build up your credit score by establishing your credit history which is an important factor in your FICO score. Always think about paying down and spreading out your revolving debt as the best strategy.

If you find some issue with negative items in your credit report affecting the process of building up your credit score you can contact a credit repair service company like DeletionExpert.com to help you remove all negatives from your credit report in less time.

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