Buying and Selling a Home

11 Ways to Raise Your Credit Score

By Mark Goldstein

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I learned a valuable lesson after I bought a cabin in Lake Arrowhead as a second home. My additional expenses were much more then I planned for and I ended up getting behind on my personal and business payables. In no time at all, my income began to fall and I created some financial problems for myself when I went to buy a car a couple of years later. My FICO credit score had dropped dramatically. It went from 750 to 550 in 18 months (the range is 350 to 850). There are things I should have done then that I would like to share with you now:

  1. If you can pay your bills on time, do it! If not, call each of your creditors and let them know you are running late. Sometimes your call is enough to stop them from reporting you 30 days late. Keep calling each creditor weekly until you get caught up. Few people do this and in some cases, they will not report you at all. If they suggest a reduced payment, ask them, “If I pay this, will you promise not to report me late?” Beg if you have to. This is no time to be proud!
  2. Get a copy of your credit report and report any errors.
  3. New credit accounts should be applied for gradually. Never open or apply for multiple accounts in the same 30-day period. Wait 60 or 90 days if possible.
  4. The bureaus expect you to shop for expensive items but keep your search inside a two-week window. Always get your mortgage loan first but do nothing else at the same time. Do your car shopping second, but nothing else at the same time.
  5. Keep your balances low compared to your available credit limit. By staying under 25% of your available credit on every card, it will raise your credit score.
  6. Don’t keep moving your debt around from card to card. Once you have a good interest rate, just pay it down. Less movement will raise your score.
  7. If you are not sure what bills to pay because of a cash shortage, pay your mortgage first. Pay your car second. Pay furniture and electronics next and credit cards last.
  8. Having no more than two or three credit cards should be your goal.
  9. See if a family member or friend with excellent credit will add your name to his or her credit card account. Every time they charge and pay on time, it helps raise your credit score.
  10. Call your credit card companies and ask them to raise your limit. A lower debt to credit limit ratio will raise your score.
  11. Get your name removed from prescreened credit card offers by going to www.optoutprescreen.com. You can also contact them by dialing 888-567-8688 (888-5OPTOUT). This will not only stop most offers, but additional junk mail as well. Not having these offers sent to you will raise your score. Signing up for the opt-out will remove you from the list for five years or you can select the “forever” out and they will remove you forever once you sign and return a form that is sent to you. Prescreened credit card offers slowly lower your score.

Just like your marriage or your job, protecting your credit takes time and energy but the benefits are lower interest rates on a home loan or a car, lower rates on credit cards, and possibly landing that great job you were applying for (some employers check credit scores).

As mortgage lenders continue to tighten up their requirements to loan money, the person with the higher score will get the loan.

Mark Goldstein is a Financial Service Coordinator helping people with refi’s and can be reached at (951) 582-4526 or by email at mgoldstein@directloanamerica.com.

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Print Date: 9/20/2020
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