Raise Credit Score - 2 Tips
You can improve your credit score by having an open major credit card. On this credit card you should try and keep the monthly balance around 10% of your available credit line.
In other words if your limit is $1,000 then try to keep the balance around $100. This shows the credit bureaus two things:
1. Your credit is being used.
2. Your ratio of available credit to debt is good.
This means you have available credit that is not being used. The credit bureaus place a large emphasis on your available credit to debt when they calculate your credit score.
If you can show you have available credit your score will receive a bump. This tip is most effective with an unsecured credit card. However any revolving line of credit will help your score.
Another tip, if your credit is to low to be approved for an unsecured credit card. Then ask a friend or relative with good credit to add you as an authorized user to their credit card account.
This is called piggyback credit. There have been policy changes to discredit authorized users from receiving the benefits on the credit report.
However it is expected to take up to 8 years before this policy change will take effect. Thus you can still receive benefit from being added as an authorized user.
If you choose this route then make sure that you trust the credit card account holder and their financial position. If this account goes delinquent or gets behind it will hurt your score.
For you to be added as an authorized user, the account holder needs to call the credit card issuer and request you to be added as an authorized user. This can all be accomplished over the phone.
You then will have a copy of the credit card with your name on it mailed to your house. I recommend returning the credit card to the account holder.
The accounts’ details are then reported on the original account holders’ credit and yours. This way you receive the benefits of on time payments and available credit.
As I said, this will only be effective for a limited time. So take advantage while it still is effective and stop paying the high cost of low credit.