Credit Score, also known as FICO Score, is the statistical data gathered by a credit bureau rating how well you pay your debts. The range is from 300-850. You can get your credit score for free from either one of the 3 top credit bureaus in the US: Experian, Equifax, TransUnion.
A better credit score means you have more chances of getting great deals at loans, higher odds at getting to rent a great apartment, get hired easily by managers that check credit history as references and have relatively faster financing processing time.
For example, two John Smiths are requesting for a motorcycle loan. John Smith A, with a better credit score of 810 gets the loan at a 3% interest rate. John Smith B, with a dismal rating of 530, gets the very same loan for 7%. That’s the tangible power of having a good credit score.
But how does one make himself have a better credit score? Here are a handful of options you might want to look into:
1. Look for a credit repair company that can assist you have a better credit score. There are some credit repair companies you can look up in your yellow pages, some of them advertise online.
Just make sure that they show results and help you out first before you pay them anything as it is illegal for them to do otherwise. Scams are also present in this service line, so research your company of choice thoroughly before committing some personal information to them.
2. This is very difficult to do as it lessens your liquidity but it is an easy and quite obvious way to increase your credit score—settle your debts. This advice is not for everyone as we are not all capable of getting a better credit score by paying our debts but if you have some money you can spare, then do use that to pay off your outstanding loans.
Instead of using that money to buy another pair of shoes that go well with your yellow tank top which you probably won’t wear with your other clothes, use that to clear your credit card bills. To help this tip, you might want to take a home-based part time job that could help you collect money for loan repayments.
3. Get a better credit score by paying your bills on time as payment history is affecting your credit score by a whopping 35%. Start little by little and these recent on time payments can really make a huge deal of a dent to fattening your credit score.
4. Know your actual credit rating. The 3 bureaus sometimes have a slightly different score compared top the other so just to be on the safe side, might as well request your free copy on all three. With this you can check the reasons why you have that rating; it will help you understand better the root of your poor credit. This deeper understanding will hopefully lead to further evaluation of the situation that may help you get a better credit score.