Understanding how to raise your credit score quick is a good idea, since an increased FICO score means higher credit levels and lower interest rates.
So you should definitely learn how to improve your score before applying for a home equity mortgage or any other kind of credit.
But realize you can't do it overnight. Although it takes some time, the more you know and the more committed you are to the project the faster you can get the job done.
It's actually possible to raise your credit score by as much as a hundred points in just six weeks. And doing it can save you thousands of dollars in interest over the term of a home equity mortgage loan.
FICO is a generic term like Kleenex or Scotch Tape. The letters stand for Fair Isaac Corporation. Fair Isaac is the software developer that created the program most commonly used to determine credit scores.
To determine your score, the computer program looks at:
1.Your payment history,
2. How much you owe in relation to your total credit,
3. How long you've had your accounts,
4. The different types of accounts,
5. And how many new accounts or recent inquiries you have.
Scoring as high as possible in each category raises your total score.
Begin by checking your credit reports for correctable mistakes. Just one error could lower your score enough to cost you a small fortune when borrowing money.
Write each credit agency immediately, giving them specific details about the inaccuracies. If they agree with your evaluation, you'll see corrections within thirty days that will improve your score.
Next bring overdue accounts up to date. This counts for about 35% of your total score. Once you're up to date, call creditors and request they remove all records of late payments. They'll often do it.
Paying down accounts and getting higher credit limits improves your debt to credit ratio, which amounts to about 30% of your total score.
If you're current with bills, creditors will usually grant a request to raise your credit limit. Just make sure they won't be asking for a credit report, since this lowers your score.
And keep in mind that paying down your debt is more effective in raising your score than transferring balances from one card to another.
Since the longer you've had your accounts contributes to a higher score, it's not a good idea to cancel old accounts. In fact, you should make small purchases on inactive accounts to activate them.
The greater number you have of different types of accounts (mortgages, credit cards, bank loans, etc.) contributes positively to your total score. This is another good reason to maintain active accounts.
In pursuing how to raise your credit score quick, always keep your credit clean and credit reports accurate. This will save you a bundle in borrowing costs and only takes a few months to accomplish. So it's definitely worth the time and effort.
