3 Tips To Raise Your Credit Score
Raise Your FICO
I’ve been doing loans for 27 years and one of the top questions that come to me almost every day is about credit. How do I raise my FICO score? There’s a lot of people sitting in the 550 to 600 range and they don’t understand how to
get to 700 to 750 range. The number one reason why people have low FICO scores believe it or not it’s because they didn’t pay their bills or have bad credit it’s that they don’t have enough credit. You should have three to four credit cards for every one
installment loan you have, a car loan is an example of an installment loan. People all the time say, “Well, I just don’t believe in credit”. Well, I guess you don’t believe in buying a house. You need a good FICO score to lower your interest rate and buy a house at a great rate with a low down payment. How do I get a higher FICO score? How do I get credit if I don’t have credit? There are three ways to do that.
Three Ways To Better Credit
1. You can apply for a credit card online. You know there’s a million different places to get a credit card and maybe you get it and maybe you don’t.
2. You can very easily get a credit card if you go to your local bank and give them $300. They will give you a credit card with a $300 credit limit, very simple to do. Now here’s the key, I want you to use it, buy a tank of gas and pay it off – buy a tank of gas and pay it off. If they give you a $300 credit line don’t max it out. I want it to be under 30% preferably under 10% of that limit. That’s how you’re going to establish great credit. Now, you must make payments. You can’t say, “Well, they have my $300. I don’t have to make the payments.” That is the fastest way to destroy your credit. But if you do that for six months you will see your score begin to rise considerably.
3. Here’s a quick way to raise your score. Who do you know that has good credit, Mom, dad, brother, sister or cousin Charlie? They can put you on one of their credit cards (now here’s the rule for the credit cards: always paid on time and we want a low balance to the limit and the older the credit card is the better. A one-year-old card is better than a three-month-old card a 20-year-old card is better than a ten-year-old card) as an authorized user. They are going to mail them a credit card with your name on it. Take it and cut it up or put it in the shredder. You’re not going to use it, but you get to piggyback on their good credit as what’s called an “authorized user”. A lot of times people get very nervous about how this works. Call me up, have them call me up, I’ll explain it, I’ll teach you how to do it. One phone call and thirty days later your score jumps.