There are many different tactics and methods that can be used to increase your credit score. Make sure you read this entire article before making any changes because not following instructions can potentially cause a drop in your score.

First, remember that credit scoring is determined by an algorithm, which means the effect that a particular action will have on the credit score will depend on many factors. There is no way to know for sure what effect a certain action will have without using a credit score analyzer. For example, a person who has 15 collections and only pays off one of them might not see the same level of score improvement as a person who only has three collections. There is no way to know for sure what effect certain actions will have on your credit score without using a credit analyzer.

Here’s a summary of some actions that may increase your credit score:

If you have credit cards and other revolving accounts:

• WATCH THE BALANCES ON YOUR CREDIT CARDS. Credit scores are

One of the most effective ways to quickly increase your credit score is by managing your credit card accounts wisely:

• Always try to keep the balance below 50% of the credit limit. The credit bureaus tend to add points for accounts under 50% of their limits and remove points for accounts with balances over 50% of their credit limits. Paying them to below 25% of their limits can have an even greater impact. And once you do that, try to keep the balance below those limits, EVEN IF you make large payments every month. Your credit card company will usually only report the balance to the bureaus once a month, and usually at a time when the balance is at its highest. So don’t assume that paying off your balance every month will mean your credit score will always be the highest possible. If you regularly exceed the limit by 50% in any given month, then you should consider switching to a different credit card once you hit that limit to keep the balance from affecting your credit score.
• If you can’t pay down the balance, try asking for an increase in your credit line. Let’s say you have a credit card with a $7,000 balance and a $10,000 limit, but you can only afford to pay the balance down to $6,000 at the present time. If you increased your credit limit to $12,000, the balance would drop to 50% of the available credit, and your score would likely increase. But be careful to do this with discipline and resist the temptation to charge your balance even higher, or you’ll end up creating more problems than you solved!
• Don’t close credit card accounts, especially if they’ve been established for a long time. I can’t tell you how many times I’ve seen someone’s credit scores drop substantially just because they closed a credit card account that had been established for a long time. The length of time credit has been established makes up 15% of your credit score, so open accounts can still have a positive impact, even if they aren’t being used. If you want to close a credit card account because you no longer want the temptation of “easy credit”, then just cut up the card but leave the actual account open. Unless you’re being charged a substantial annual or monthly fee, there’s little harm in keeping the account open.

Do you want to get on the fast track to buying a home but aren’t sure if your credit is up to par? Need some advice on what to do? Fill out our quick contact form and we’ll help you get started!

If you are the type of person that is afraid to use credit cards because of past credit issues, or maybe you can’t even get a credit card because of those issues, a secured credit card may be a great alternative that will allow you to enjoy all of the advantages of credit cards without having to worry about your credit card debt getting out of control.

In this day and age, it seems we are conducting more and more transactions over the phone and the internet that require credit card numbers. The reason for this is simple. Literally. Credit cards simplify our lives in many ways. They allow us to save a great deal of time and they are super convenient. Why bother leaving the comfort of your home when you can shop, view and compare products online?

But many people have reservations about using credit cards for many reasons. Many have gotten themselves into trouble in the past with high interest debt or they can’t get approved for a credit card because of past credit issues. A secured credit card solves both of these problems! Secured credit cards are available to almost anyone regardless of past credit issues. And since the credit limit on a secured credit card is limited to the amount of security deposit that you are willing to put up as collateral, there’s no need to worry about balances getting out of control. And the interest rates on secured credit cards are often more competitive than unsecured cards for the simple reason that the bank is much less likely to lose any money since the card is “secured” with a cash deposit.

Aside from the convenience aspect, credit cards provide a higher level of consumer protection than any other form of payment, even debit cards. Think about it. If someone steals your debit card, that’s money that comes directly out of your checking account whereas a credit card is not tied to living expenses. There’s no risk of bouncing checks or being short on cash. Most banks will also not extend the same level of protection to consumers for transactions made on their debit card. For example, I recently had a dispute with an internet merchant who overcharged me for a service. Unfortunately, I charged this on my debit card, which meant I was left to fend for myself against the merchant. If I had charged this on my credit card, the card issuer would have removed the charge and helped me dispute this with the merchant. I got lucky and was able to get my money back, but it took almost six months. I learned the hard way that using your debit card for internet purchases can pose many problems. Credit Cards offer a level of protection higher than any other form of payment.

Learning how to use credit cards for their benefits without falling into the trap of compound interest is the tricky though, and many people do not have the financial self-discipline to do that. The smart way to use credit cards is to pay the full balance every month whenever you can. A good rule to live by with credit cards is only charge what you can afford to pay at the end of the month.

Keeping active accounts on your credit report is crucial to maintain a good credit score. Many consumers who have run up lots of credit card debt in the past cancel all of their credit cards in an effort to “rid themselves” of the temptation to get back into financial trouble. While this can be a good strategy, canceling credit cards can drastically lower your credit score since a significant portion of the score is determined by active accounts and the length of time accounts have been established. Simply canceling all credit cards can be a mistake that can result in a lower credit rating. It’s better to keep some accounts open and ask the creditor to lower the credit limit if that’s a problem.

Secured credit cards are the best way to maintain a good credit rating and enjoy the various benefits of having a credit card while still maintaining responsible spending habits.