3 Easy Steps To Raise Your Credit Score

Is No Credit The Same As Bad Credit?

How would you like to live life knowing you’ve paid off your mortgage, car loan, student loans and credit cards? For many this is a dream come true. This, they figure, will result in a perfect credit score. But credit bureaus think otherwise. No credit is the same as bad credit. Yes, that’s right. Credit scoring takes into account a healthy mix of debt versus not having any demonstrated record of debt-handling ability. One of the gravest mistakes people make in their quest for financial freedom is to pay off all their credit cards and then close them. This in most cases does not help your credit score.

There are 3 major ways to boost your credit score; The first is to pay charged-off accounts but make sure you get a commitment from the creditors in writing that the item will be removed from the report upon payment of the settlement amount.

Another way is to acquire new credit. Get 2-3 credit cards. Most people with bad credit may have a hard time qualifying for a good credit card so the answer would be to get a secured card. Applications for secured credit cards are hardly denied because the applicant has to deposit an amount into a savings account before the card can be issued and activated. Caution should be used when selecting a secured credit card because of the varying fees, terms and conditions offered by different financial institutions. For example, some companies have lofty annual fees, others will ask you to pay for insurance while others will require a monthly fee. Even more require an initial application fee. By far, the best place to get a secured credit card is a credit union. You may visit http://creditunionaccess.com/ to access credit unions in your area. Also visit NO Hussle Cash for secured and unsecured credit cards for people with bad credit.

A third way to raise your credit score is to ensure timely payment of your monthly bills. You can enlist the use of technology to achieve this. For example, most banks now offer automatic bill pay to their customers for a small fee. Open a separate checking account for bills and automate it.

We have seen how having no credit is as good as having bad credit because financial institutions and lenders want to see that you have a grasp on handling finances, especially installment loans, credit cards and revolving accounts.