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How to improve your FICO score

There are a number of steps you can take to improve your FICO score. Here are our top 5 suggestions to help you to improve your FICO score:

 

1. Get your credit report: The most important and easiest thing to do is to obtain a copy of your credit report, review it and dispute any errors you find right away. Many people have no idea what is on their credit report. It is not unusual for your credit report to contain errors or old information. You can easily check online through the primary credit reporting agencies: TransUnion, Equifax and Experian. You are entitled to one free report from each of the agencies per year. We suggest to order a report once a quarter since it will not cost you anything and it will help keep you aware of your credit situation.

2. Create history as a borrower: Perhaps your FICO score is low because you have not established yourself as a borrower. The easiest way to fix this problem is to apply for a couple of credit cards (yes more than one but be responsible with the number), charge only what you know you can pay each month, and thereby you will begin to establish a history for yourself. Be careful though to keep your charging to no more than 30% of your card limit as this is utilized in establishing your FICO score. Taking out small loans from the bank, or purchasing furniture and other household items on store credit will also help your FICO score. The important thing is to establish a history, but not to put yourself at risk of damaging your credit rating.

3. Pay all your bills on time: This sounds easy, but many people simply forget or become so busy with other things that they lose track of the bills. 35% of your FICO score is based on your payment history—late payments or skipped payments will bring down your score. Try to establish a routine whereby as soon as the bill arrives, you pay it. Or, set a specific date each month for bill paying and store all your bills in a place where you can find them later. If you know that you will never be able to adopt such a routine, then consider setting up automatic payments for all your credit cards and loans whereby the amount due is deducted straight from your bank account. Of course, be sure you have the funds in your account to cover the bills.

4. Multiple credit cards: Even if you have multiple credit cards, try to keep your purchasing charges to one card. Maintaining small balances on multiple credit cards actually hurts your FICO. It is best to pay off the small balances on your cards, and then use just one or two credit cards for all your purchases.

5. Resolve all your outstanding debt as soon as possible: Try to work out a payment plan with the creditor or settlement with the collection agency. Debt resolved in this way will not negatively influence your FICO score.

 

It may take a little time, but slowly you will re-establish yourself and your FICO score will improve. The Peerform lending platform is a responsible way for borrowers to get the loans they desire. When you feel the time is right, you are welcome to apply for a loan on the Peerform platform.

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