Simple Ways to Improve Your Credit Score
Upcoming SlideShare
Loading in...5
×
 

Simple Ways to Improve Your Credit Score

on

  • 1,097 views

http://www.Cram4You.com Improving your credit score can significantly increase your credit worthiness. So let's discuss a few tips on how to improve your credit score.

http://www.Cram4You.com Improving your credit score can significantly increase your credit worthiness. So let's discuss a few tips on how to improve your credit score.

Statistics

Views

Total Views
1,097
Views on SlideShare
1,097
Embed Views
0

Actions

Likes
0
Downloads
1
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • Improving your credit score can significantly increase your purchasing power and credit worthiness. So I will discuss a few tips on how to improve your credit score, don't worry – this is all pretty basic stuff.
  • So here's a really boring pie chart to show you the different pieces we will discuss. But as a reminder, no part of your credit score is based on your income, or where you live or went to school, mkay ?
  • First, lets talk about your payment history . 35% of your credit score is based on your debt repayment history. Debts such as your credit cards, home loan and car loans report your payment history to the credit bureaus on how well or how poorly you pay on time (this fact alone means that some people are totally screwed). If you were reported as paying any late payments, this could drop your credit scores dramatically and that could mess up your scores for a while – so don't do that. If you were not late , but your credit report says you were , you might want to consider credit repair (cuz we all know the credit bureaus never make mistakes, right? Yeah, uhuh) . If you have no credit history, you're not totally screwed, so you can start by opening an account with the same institution where you do your banking. If you don't have a bank account, stop the video and go get one.
  • Next, - is your balance-to-credit-limit ratio. This is a little nerdy, so I will break it down for you. 30% of your credit score is based on your balance-to-credit-limit ratio, or in other words, how much of your credit limit is debt ?. To figure our your ratio, divide the balance by your credit limit and will give you the percentage of your balance-to-credit-limit ratio.
  • For example, if you have a $1000 credit limit, and your balance is $500, that would mean you have a 50% ratio – yeah, that too high ! To obtain the best credit score, your balance should be a minimum of 5% to a maximum of 25% balance-to-credit-limit ratio. Any higher than this means it is risky to the lender and he will give you the stink eye (that means your score goes down). Any lower than this means the account may not be included in the calculation at all.
  • This only applies to unsecured lines of credit, so your car loan and home loan are not included in your ratio. Sometimes if you miss a payment, your lender may drop or reduce your credit limit, which will make your credit scores go all cattywompus (for you nerds out there, that means it will drop your scores, mkay?).
  • On this next boring slide is the age of your credit - this counts for 15% of your credit score. The longer you manage your credit history the higher the credit score rating. Older accounts that are open with no balance are the best way to age and improve credit scores. To add some age to your credit history, talk with your parents or close friends about them adding you as an authorized user to their older (but perfectly paid) credit accounts with no balance. Their account will then show up on your credit history. This way, you can improve the age of your credit history and increase credit scores immediately . Don't do this with just any willing bozo, because if they screw up, it will mess up your credit!
  • On this next unimaginative slide, we see that 10% of your credit score is based on the types of credit. A mortgage and a car loan are types of installment loans. Credit cards and department stores are types of revolving loans. These are just two types of many . It is generally best to have a healthy mixture of types of credit to increase your credit score. A loan from your bookie doesn't count.
  • And finally , 10% of your credit score is based on new credit. A new account can both help – and - hurt your credit score rating. A new collection account can hurt you. A new account with a high balance-to-credit-limit ratio can hurt you, conversely - -, a new account with a low balance-to-credit-limit ratio can improve your credit score. Excessive inquires can also hurt your credit scores, so don't get all crazy and apply everywhere because it will back fire.
  • To achieve the best credit score, pay down your balances, shift or transfer some of that debt to other accounts, and of course, pay your payments on a timely basis and don't be afraid to challenge credit reporting errors to repair your credit. It is helpful to note, that if you pay off all of your debt, your credit score will go down ! I know – that is really messed up, but it's true! Remember, your credit score is based on your credit and debt repayment history. So if you have no debt, your credit scores can totally take a nose dive. If your credit score rating needs improvement, maybe because you have some late payments, (or worse) your can repair your credit yourself, or better yet, hire an affordable credit repair company. These are just a few simple steps to help you achieve the best credit score possible! 740 to 800 hundred is possible, I did it, so can you. Good luck to you.

Simple Ways to Improve Your Credit Score Simple Ways to Improve Your Credit Score Presentation Transcript

  • Basic Factors That Affect Your Credit Score
    • Pay down balances, increase limits
    • Transfer debt to other accounts
    • Pay monthly payments on-time
    • Build new credit
    • Build old credit, or aged credit
    • Use a variety of types of credit
    • Repair mistakes, or hire a pro
    • Paying off all balances will cause scores to plummet
    Tips Improve Your Credit Score 740-800 Credit Scores are Possible!
  • Basic Factors That Affect Your Credit Score 49% of Americans do not understand that credit scores measure credit risk , and 45% incorrectly think that increasing income will increase credit scores. 2005 survey results by Consumer Federation of America and Fair Isaac Corporation
  • Basic Factors That Affect Your Credit Score
    • Creditors report pay history to bureaus
    • Pay debts on-time
    • Get mistakes corrected
    • Credit Repair
    • No History? Get started by opening an account.
    Pay History: Debt Re-Payment History
  • Basic Factors That Affect Your Credit Score
    • Divide balance by Credit limit = ratio
    • Higher than 25% is bad bad bad!
    • Missed payments cause credit limits to drop
    • Paying off balances cause scores to drop
    Amount Owed: Balance-to-Credit-Limit Ratio
    • Credit Limit: $1,000.00
    • Balance: $500.00
    Basic Factors That Affect Your Credit Score Amount Owed: Balance-to-Credit-Limit Ratio $500.00 ------------ = 50% Ratio $1,000.00 (too high!) Ideal: 5% to 25% Balance-to-Credit-Limit-Ratio
  • Basic Factors That Affect Your Credit Score
    • Divide balance by Credit limit = ratio
    • Higher than 25% is bad bad bad!
    • Missed payments cause credit limits to drop
    • Paying off balances cause scores to drop
    Amount Owed: Balance-to-Credit-Limit Ratio
  • Basic Factors That Affect Your Credit Score
    • The older the better on open accounts
    • Old accounts with no balance are best
    • Go beg Mom n Dad to add you to their accounts
    • Clowns ruin everything
    Credit Age: Age of Each Account
  • Basic Factors That Affect Your Credit Score
    • Variety is best
    • No need to obtain all types
    • Avoid high risk lenders
    • Bookies can hurt you
    Credit Types: Installment, Revolving, Optional, Mortgage, etc.
  • Basic Factors That Affect Your Credit Score
    • New accounts are good when low balance
    • New collections are bad all the time
    • High balances are bad
    • Excessive inquiries make you look desperate (or ugly)
    New Credit: It Shows Continued Participation
    • Pay down balances, increase limits
    • Transfer debt to other accounts
    • Pay monthly payments on-time
    • Build new credit
    • Build old credit, or aged credit
    • Use a variety of types of credit
    • Repair mistakes, or hire a pro
    • Paying off all balances will cause scores to plummet
    Basic Factors That Affect Your Credit Score Thanks for Watching & Good Luck! Credit Scores of 740 to 800 are Possible! Tips Improve Your Credit Score