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How to Improve Your Credit Score
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Pay down revolving balances to less than 30%
(This will improve your credit score in 30 days or less)
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Remove a recent late payment
(A single late payment can drop your credit score by 60 to 110 points, there are a couple ways to request a removal. The most common and effective way is to call the original creditor and ask for a goodwill adjustment. If they resist, you can even negotiate the removal of the late payment by agreeing to sign up for automatic payments. For other late payments, you can file a dispute against the late payment for inaccuracy.)
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Remove a collection account
Do NOT just pay a collection. A paid collection usually doesn’t help improve your credit score! Instead, negotiate a “pay for delete” IN WRITING with the collector. Only when you have a written agreement should you pay a collection account, and then work on getting the account deleted.
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Raise your credit limits
If you can negotiate an increase of your credit limit with a soft inquiry, then you will instantly decrease your revolving balance ratio (revolving balance divided by your credit card limits).
What makes up your Credit Score?
Payment History – 35%
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Number of late payments, how late, how much was owed
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Frequency and recency of lates
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Number of accounts where you are ‘paid as agreed’
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Number of accounts which have past-due and the amount past-due
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Public records or collections
Amounts Owed – 30%
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Your aggregate debt
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Amounts owed on all credit cards and all installment
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Number of accounts with balances
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Whether there is a balance on credit card accounts
Length of Credit History – 15%
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How long accounts have been established; oldest account,
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Time since account activity
Types of Credit – 10%
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What types of accounts you have
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How many of each type of account
Types of credit could include open and closed credit cards, an auto loan or an open mortgage account.
New Credit – 10%
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Number of recently opened accounts