A Simple Strategy for Boosting Your Scores
People often get hung up on payment history issues when they think of improving their scores.
The truth of the matter is that your payment history is only 35% of your score.
Another 30% comes from your debt utilization.
If you want to calculate your credit utilization for all your accounts, first add all the balances. Then add all the credit limits. Divide the total balance by the total credit limit and then multiply by 100. The result is your overall credit utilization.
FICO factors your overall debt utilization as well as average per account, revolving, and installment debt separately.
A little-known fact is that your revolving debt is weighted much more heavily than your installment debt.
That means if your credit cards are maxed out, then it will hurt your score, but it won’t hurt you if your loan balances are high.
Lowering your debt utilization is a very fast and effective way to get a quick score increase.
There are 2 ways to lower your debt utilization: 1) Lower your debts or 2) Increase your available credit.
Let’s focus on #2.
Increase Your Available Credit
Quick question for ya.
When is the last time you called your bank and asked for a credit limit increase?
A credit limit increase lowers your debt utilization instantly.
They will place a hard inquiry on your report, but the overall effect will be a score increase.
And if you get an interest rate reduction, too, well then that’s just bonus.
Improve your debt utilization ratio with The Stuff Clubs $20,000 credit line for all credit types, bad credit is OK because your required to pay for half at purchase and receive credit for the balance. Keeps your spending in check.