Fico Help Central

Many people wonder “What’s the fastest way to Raise my Credit Score?”. It depends on how much you want to raise it?”

If you wish to increase your score from 590 to 660 then your strategy will be very different from someone wanting to go from 680 to 735. Because your starting point is different, it will require a different approach.

Also, while the removal of negative items from a report will almost always lead to an increase in score, it’s a basic concept at best. In this and upcoming blogs, we’ll discuss some inside techniques known by very few to help you accomplish this goal.

These are techniques which you can use even if you have NO derogatory information on your credit report. We’ll start with the most overlooked strategy first and that’s your…

DEBT to CREDIT RATIO:

The most misunderstood belief by most people is “I have excellent credit. I pay all my bills off in full every month!” While being debt free is a great achievement for anyone, this is a false belief which will stop you from understanding how your debt to credit ratio holds the key to getting your “credit mindset” right.

Your debt to credit ratio is your ratio of debt to total available credit you have been extended (revolving accounts only). For example. If you have $10,000 in total unsecured revolving credit accounts and you’re currently in debt $2500, then your debt to credit ratio is 25%. Since the main way lenders make money is by charging interest, one of the elements of the credit scoring model is driven by your ability to maintain balances and pay over time. This shows your true (long term) credit worthiness which is most profitable to lenders since they make money primarily via interest and not annual fees.

It has been proven, without question, that carrying the proper debt to credit ratio will boost your score faster than paying off your bills in full each month.

Of course, how do you Raise your Credit Score if you’re like most Americans and your debt to credit ratio is too high? For example, you have $10,000 in unsecured revolving accounts but you owe $8500, thereby giving you an 85% debt to credit ratio. How can you bring it down without selling everything you own? The answer is simple and we’ll discuss it in the my next post.

To learn more about how to dramatically Improve your Credit Score, visit my website at www.ficohelpcentral.com.

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