How Can I Increase My Credit Scores?

How To Increase My Credit Scores

More and more consumers are googling & searching the web for ways to improve their credit scores and raise them. A common problem we see when evaluating credit reports is that many do not either have sufficient or long enough credit histories, or a “thin file”, with hardly any credit history at all. Lenders rely heavily on credit reports and credit scores. However, traditional reports and scores might not tell the whole financial story if a consumer has what’s considered a “thin file” of less than five tradelines included on their credit report. Having too little information upon which to base a lending decision can lead to a rejected credit application or approval only with high-interest rates and fees. 

What is a Tradeline?

A tradeline is industry lingo for an account on a credit report. Account information includes the name of the lender, the type of account, details about the account balance, credit limit or principal loan amount, and the dates it was opened and closed, and most important the payment history of the account. The entry will show both the current payment status and whether or not there were late payments in the past.

At least five accounts on a report show credit lenders that the consumer has a good mix of accounts and enough credit history to have some insight into their creditworthiness.

Fewer than five accounts result in what the credit industry calls a thin file. Someone with a thin file is probably new to credit because they dont have much of a credit history. Creditors see people with thin files as potential risks solely because the consumer doesn’t have much history to determine whether he or she is a good credit.

 What Should I Do? 

First, evaluate your credit reports. See what you already have reporting positively. If you don’t know what to look for have a credit consultant look over your reports to see what you are lacking in and where your scores need help. If you have credit cards with high balances PAY THEM DOWN QUICKLY!! Paying down debt will boost your scores quickly.

Second, if you do not have any positive accounts reporting look into opening secured credit card accounts, tradelines, or credit builder loans that will help you “BUILD” your credit. Building your credit overtime will boost or increase your credit scores.

Third, Negative information reporting on your credit reports is a “score killer”. 

Negative information on your report is by far the most important factor in your credit scores. Late payments, collection accounts, charge-offs and settled accounts all look bad and can persist on your credit report for up to seven years. Bankruptcies can remain for a decade.

Catch up on late payments and always pay the minimum due on time to help your restore your creditworthiness. Look into credit repair as a option to have negative information and accounts challenged and removed. 

A New Trend

One trend that’s on the rise is the use of what’s called “alternative data” to help determine a consumer’s creditworthiness. Alternative data includes information that’s not traditionally included in a credit report, such as rent payments, utility payments and more.

When added to a credit report, this information helps creditors evaluate the potential creditworthiness of consumers who fall into that “thin file” category.

Experian has launched a new program called Experian Boost™

What is it?

It’s a platform that consumers can use to add rent and utility payments to their Experian credit report. It actually connects your online bank account to your Experian credit report, so you can have Experian add your on-time payments on your credit report.

Boost helps those with thin files improve their FICO® Score almost instantly. Anyone with a lower score, say between 580 and 669, can really benefit from increasing their scores quickly. That can give them access to lower interest rates and broader financial inclusion.

The example we share is that someone with a FICO ® Score of 720 can pay $4,020 less for a $10,000, 5-year auto loan. That saves them $67 a month more than someone with a score of 500. Boost is the first and only opportunity consumers have had to proactively add positive payment histories to their credit file.

Credit Corrector Solutions has access to many tradelines that can “build” your credit file. Along with the new program “Experian Boost” consumers can see a leap in their credit scores if they add the proper tradelines to their reports.

If you take care of your credit report, you’ll have good credit scores.

Call Us Today at 1-877-335-8865 for a free consultation on how to boost your credit scores or fill out our contact form to receive a call back. We can help you increase your credit scores!

 

 

 

This article was written by CEO Elyse Wood of Credit Corrector Solutions

 



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