Having a low credit score can cost you thousands of dollars in extra interest payments. That’s why you seriously need to think about lifting up your credit score. Here are some important tips to boost your score fast and with no money.
Check Your Credit Report
The first step is knowing what your credit score is and what’s actually on your credit report. You are entitled to one free of the charge credit report every year from annualcreditreport.com. Once you have your credit report, look at it and try to find any errors or inaccuracies so you can dispute them later on.
Late Payments
One of the main factors that contributes to having a low credit score is having late payments. Payments make up to 35% of your overall credit score, so it’s a big chunk of what actually makes up that low credit. Typically, late payments go on your credit report after about 30 days. Any late payments over a hundred and fifty days old will go to collections, and that is the second thing that lowers your credit score.
How to Deal with Collections?
The important thing you need to know about collections agencies is that they purchase credit from your credit card company or whoever sold it to them. Let’s imagine you owe someone $10.000; the collections agency buys that debt for pennies on the dollar. Let’s say they purchased your $10.000 debt for a thousand dollars. You need to understand one thing; if you are getting hassled by collections companies, you don’t necessarily have to pay all your debt back.
Don’t Max Out Your Credit Card!
The next thing that leads to a low credit score is having maxed out credit cards. The main solution with maxed credit cards is obviously paying down your debt. However, we offer to solve this problem by increasing your credit limit or applying for more credit. For example, you have a $1000 credit limit, and you spend all of it, that card is now maxed out. However, if you spend $1000 when your credit limit is $10.000, you will not max out your credit limit. The more debt you have available, the more you can spend and not affect your credit utilization.
The second way to lower your credit utilization ratio is to apply for a high limit credit card. Now you are thinking of getting a hard credit pull on your credit report that decreases your score. Meanwhile, an increase in your credit score from having an extra credit limit will outweigh a hard inquiry on your credit report. Thus, if you want fast money, the first thing you need to consider is how it will affect your credit score.
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