Going From Fair Credit To Good Credit
Maybe you have fair credit today, but that need not be a permanent condition. Your credit standing can change, and it can change with some speed. The pioneering FICO-brand credit scoring system uses five factors to rate your financial standing. Each factor has a certain “weight” on your credit score.
- Credit history (35 percent)
- Amount owed on credit (30 percent)
- Length of credit history (15 percent)
- New credit (10 percent)
- Credit mix (10 percent)
These categories suggest three quick steps you can take to get better credit.
- Do not open new accounts. When a retailer offers $10 off if you will use their credit card, you’re being asked to open a new line of credit. Don’t be tricked. Since new accounts hold down credit scores, you’re better off paying the $10.
- Credit history is important, but most important of all is recent credit history — what you’ve done in the past few months.
- Make a point to pay all bills in full and on time. This is not only good for your credit standing, but will also end costly and unnecessary late payment penalties.
- Third, review your credit report. A 2013 study by the Federal Trade Commission found that “five percent of consumers had errors on one of their three major credit reporting services. How big an error? — enough to change an individual’s credit standing.
- The easiest and fastest strategy is paying off revolving accounts, like credit cards, or paying the balances down, can have dramatic impact and quickly raise scores.
- Turbo Mortgage features a “rapid rescore” feature that can impact your scores within a few days, and accurately predict how many points your score will raise by applying these strategies.
- Ask your Turbo Mortgage loan officer about “RAPID RESCORE”.