The first step in improving your credit is to stop doing the things that create bad credit. When you find yourself in a hole, stop digging!
Keep in mind that your FICO score is created of a number of features, some of which have nothing at all to do with whether you’re making your payments on time. So even if all of your payments get made when they are do, your credit score may still be lower than you expect.
Here are the areas of your credit score not related to late payments that you can improve.
First, how much money you owe. 30% of your score is based on how much of the available balance you owe on each account. So provided you have the income, you can 1) stop charging on your accounts, and 2) transfer balances to spread the balance levels out among all of your accounts.
How many credit lines you have. Yes, it’s true.. you can improve your score by going out and getting a new line of credit. This is a cautionary bit of advice, though… it works better the better your credit is. So if you’re under 600 this strategy may hurt your score.
Don’t close unused credit cards… just don’t use them. Cut up the card if you want to, but keep the account open. Closing unused accounts hurts your credit ratio.
Do a cash-out refi to pay off credit cards. Most gurus don’t recommend this because you take short term debt and make it long term debt. However, when you do it the right way, this is a great way to reduce you debt load and improve your score. More about this in my next article.
People often wonder what my credit scores are, expecting them to be in the 800s.
Hardly. I use my credit way too much for that. 
Here are my credit scores from when I recently pulled them… Continue Reading »
