As more people look toward credit to finance expenses big and small, credit scores have become an important number, with more people using reputable credit repair companies to help make their scores great.
It is estimated that American consumers owe $3.4 trillion in debt—or more than $16,000 on average per household. Much of that comes in the form of revolving debt, which refers to credit cards, lines of credit, home equity loans, and other similar loan options, which can improve your bottom line in the end by building solid credit and having more money on hand for necessary expenses. As people look to credit to help finance their lives, credit scores and overall creditworthiness has become a crucial sticking point. Can you qualify for the loan you want in order to get the funds you need?
Keep In Mind
As it becomes a central issue in consumer finances, more and more experts have devoted their time to discovering ways to improve credit scores and maintain them. Although the actual formula for calculating FICO scores, the most popular credit score measure, remains a highly guarded secret, experts have discovered that there are ways for consumers to improve their credit even without the inside scoop from FICO.
Lenders prefer to extend credit of any sort to customers who have a proven track record of paying their outstanding debts on time, every time. Everything from utilities to credit card debt can affect credit scores if left unpaid or are paid after the due date. Timely payment can reflect up to 35% of a person’s credit score. Moreover, non-payment affects credit scores over the long-term, making a potential borrower less trustworthy from a lender’s viewpoint.
- Credit Utilization
This takes into account how much of a person’s available credit is being used. For example, if someone has a total credit limit of $4,000, and uses only $400, their credit utilization is 10%. Having higher levels of credit utilization will always have a negative impact on your credit score. As such, authorities on credit scores agree that it is vital for consumers to be aware of how much of their credit they are using and to keep it as low as possible.
These happen pretty frequently, and in some cases can cause scores to drop by double digits. Today, there are many companies that can help consumers dispute these charges to have them removed, and this is an incredibly simple way to boost scores closer to perfection. Mistakes can happen because of misfiling, clerical error or identity theft, so it pays to keep your eye on your credit reports and know what the points add up to.
Knowing is Half the Battle
While knowing about credit scores and how to improve them is important, many consumers still do not take the actions required to improve their standing with the major credit bureaus and creditors. However, it is easier today, with automated systems and credit repair companies, to improve credit, as services designed to help consumers stay on top of their credit scores are successful at taking the battle off of your hands. With the advent of credit reporting services, even from credit bureaus themselves, it is incredibly straightforward for consumers to stay one step ahead of lenders, and even simpler to raise scores toward the perfect credit score with top credit repair services.