Let’s say your mom, dad, husband, or wife has a credit account in their name that has a long history, low balance, and is paid as agreed. Let us also say that they are willing to add you as an authorized user. It is as simple as the cardholder calling the credit company and requesting a card in your name. All of the score enhancements attached to that account will then be added to your score. It may take anywhere from a few days to a few weeks for that account to report to the three repositories, but when it happens, your score will be boosted.
Go out and get another credit account. If you have a low score, you may believe you cannot get another account, but this is generally true for credit cards, but there are other accounts you can get. Secured credit cards are like prepaid cell phones. You pay several hundred dollars into a secured account at a credit union or bank and receive a credit card in return. When you use the account, it is reported to the credit repositories as a credit card. Remember that you don’t want to charge much as it is better to keep your balance very low. A low balance on available credit enhances FICO scores.
If you are maxed out on your credit cards, your score suffers tremendously. By paying them down to less than 30% of your authorized maximum, your score will be significantly improved in a short time, typically within a month.
Another option is asking your credit company to increase your credit limit to hit that 30% ratio. The more accounts you have paid to under 30% of the credit limit, the better your score.
Collection accounts are debts that creditors have usually given up on but continue to be reported on your credit. Meaning the damage has been done. You know you owe the money on these debts and want to come clean, but do not do it right away. Old accounts have already impacted your score, and the older they are, the less effect they have. If you pay the account off, the creditor is happy, but you have added recent activity to a “derogatory account,” and your score will suffer rather than improve.
Pro Tip: It’s Best to Pay Your Credit Card Balance in Full Each Month. Leaving a balance will not help your credit scores—it will just cost you money in the form of interest.
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