Some say credit scores are like trust. They take years to build, but all it takes is a small slip-up to shatter them to pieces.
Understanding what goes into building a credit score can be tricky. There are a lot of factors that can affect your credit score.
Here are some of the most common questions involving credit scores with answers that will shed some light into the matter.
“If you don’t take good care of your credit, then your credit won’t take good care of you.”
1.How long does it take to improve credit score?
The answer to this question depends on the credit score you started with. According to a news report, a person with a higher starting score will have more difficulty bouncing back compared to one who started out with a lower one.
Let us say a person with an initial FICO score of 680 missed a monthly payment on a new home or car. It would take approximately two and half years to bring his credit score back up.
On the other hand, if the person started out with a FICO score of 780, given the same scenario, it could take up to three years for his credit scores to recover.
2.How to increase credit score quickly?
Regardless of how you feel about them, credit scores can affect your financial options. Your FICO scores can affect whether or not your credit card application gets approved. They can even influence what mortgage rates you get.
With this in mind, you always need to be careful about your financial transactions so that your credit history is kept pristine.
“If repairing one’s credit is as easy as sending some dispute letters to the credit bureaus then why doesn’t everyone have good credit?
If you do have a poor credit score, worry not as there are ways to bring it back up quickly. Here are a few quick tips:
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- Request for a free credit report from the three biggest credit reporting companies: Equifax, Experian and TransUnion. By law, you have access to a free report annually. Examine everything that is on the report. Look for any unpaid or late payments. Send a dispute if you find anything inaccurate in your credit report.
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- Pay your credit bills twice a month. Creditors only report to credit bureaus once every month. By doing this, you reduce your running balance.
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- Raise your credit limit. Call your creditor to get your credit limit raised. This will help raise your utilization rate as well. The key with this tip is to not use the new credit to improve your utilization rate.
For other questions on credit scores, contact Golden Eagle Mortgage Group. Our team of mortgage advisers will gladly answer all your queries regarding credit scores.