Turn the Ship by Boosting Your Credit Score!

Financial experts consider a score of 600 average and 680 or above (max possible 850) good. For an FHA insured loan, you’d need a credit score of more than 600. Consumers often fall short of the required credit score by just a few points. If this difference is around 50 points, there’s an effective way for them to improve their credit score and get over all the financial constraints.

Credit Reports and Credit Scores:

Your credit score is based on the financial items reported on your credit report. These items are reported by creditors to the three credit bureaus in the U.S. — Equifax, Experian and TransUnion. Fair Isaac Corporation or FICO has a set of sophisticated algorithms to convert these items and their correlation to the user, and other items on the list into a financial score, which is also called a credit score.

Five factors that affect credit scores:

● Payment History
● Accounts Owned
● New Credit
● Length of Tradelines
● Types of Credit

Each category carries a different weightage. Your credit history in terms of debt payments is the most crucial financial factors in your life considering given its 35 percent weightage on your credit report.

How to Increase Your Credit Score

According to a research by U.S. Public Interest Research Group, 70 percent of the credit reports polled had major errors and broad scope of improvement. Removing the outdated and inaccurate information alone can boost your credit score by at least 50 points. If identifying and removing critical errors from your credit report seems like a challenging task, you can hire a professional credit repair company to do it for you.

In case your credit situation is quite dismal, you should try to formulate a long-term strategy and consistent payment history to get your credit score back on track.

Examples of good financial behavior:

● Paying bills on time
● Maintaining a good debt-to-debt ratio
● Not applying for indefensible loans

By following the ways mentioned above, you can build a high credit score to be eligible to apply for various financial assistance. Before that, you also need to consult a reputed credit repair firm that can help you boost your credit rating.