Increase Your Credit Score by 100-200 Points in 90 Days or Less

ansonmass

Let’s discuss Credit scores and I have a surprise insider secret for you at the end of this lesson to increase your credit score by 100 -200 points and put a 800 FICO score easily on your to-do-list. With that said, let’s begin..

What Is A FICO Score?
A FICO score is the universal credit score measure used by the 3 major credit bureaus Equifax, Transunion and Experian. It’s the number lenders use to help them decide: “If I give this person a loan or credit card, how likely is it that I will get paid back?” A FICO score is a snapshot of your credit risk picture at a particular point in time. The higher your score, the lower the risk to lenders. Fair Isaac and COmpany Inc. develops the mathematical algorithms used to produce the actual scores, thus the name FICO score.

How Can I Improve My FICO Score?
Generally, people with high FICO scores consistently:
- Pay bills on time.
- Keep balances low on credit cards and other revolving credit products.
-Have a nice mix of revolving and installment accounts
- Apply for and open new credit accounts only as needed.

What Are The Most Important Factors In A Score?
FICO scores consider five main kinds of credit information. Listed from most important to least important, these are:
- Payment history.
- Amount owed.
- Length of credit history.
- New credit.
- Types of credit in use.

How Often Does My Score Change?
Your credit file is continually updated with new information from your creditors. The FICO score is calculated based on the latest snapshot of information contained in your file at the time the score is requested. So your FICO score from a month ago is probably not the same score a lender would get from the credit reporting agency today. Fluctuations of a few points from month to month are
quite common.

How Are FICO Scores Calculated?
Every FICO score is calculated at a credit reporting agency using a mathematical formula that evaluates many types of information on your credit report at that agency. By comparing your Information to the patterns in millions of past credit reports, the score identifies your level of future credit risk.

What Are The Highest And Lowest FICO Scores?
FICO scores range from 300 to 850. The higher the score, the lower the predicted credit risk for lenders.

Does Everyone Have A FICO Score?
For a FICO score to be calculated on your credit report, the report must contain at least one account which has been open for six months or longer. In addition, the report must contain at least one account that has been updated in the past six months. This ensures that there is enough information – and enough recent information in your report to compute an accurate score.

How Much Do FICO Scores Change Over Time?
Research indicates that, for the most part, FICO scores are pretty stable from one month to the next, however changes in your credit behavior can significantly impact your FICO score over time. The degree of change in score is driven by a variety of factors such as:

-Your current credit profile.
How you have managed your credit to date will affect how a particular action may impact your score. For example, new information on a credit report, such as opening a new credit account, is more likely to have a larger impact on a consumer with limited credit history compared to a consumer with a very full credit history.

- The change being reported. The “degree” of change being reported will have an impact. For example, if someone who usually pays bills on-time continues to do so, then there will likely be only a small impact on the score one month later. On the other hand, if this same person files a bankruptcy or misses a payment, then there will most likely be a substantial impact on the score one month later.

- How quickly information is updated. Remember, there is often a time lag between when you perform an action (like paying off your credit balance in full) and when it is reported by the creditor to the credit bureau.

Secret To Improving Your FICO Score
Most people don’t know that the best way to improve your FICO score is to reduce or delete negative information AND (drum roll please) Increase positive credit lines!!! NOTE: Even if order your free annual credit report for all three agencies from http://www.annualcreditreport.com and you delete all negative information but have no positive OPEN credit lines, your FICO score will not be maximized. The positive credit lines have a multiplier effect on your overall credit history. A good mix should be 1-2 lines revolving credit lines (like credit cards, department store cards, gas cards) and 1-2 installment credit lines (mortgages, appliance purchases on credit, car payments). Lastly, remember, always pay more than the minimum due if possible, even if it is only slightly more because it will dramatically reduce the overall amount you pay due to the compounding effect of interest. Some clients I advise have reduced their mortgage payments due from 30 years down to 15 years by following a more refined version of this strategy. This snowballing approach to debt in conjunction with a bi-monthly plus 5% strategy is a custom strategy that works like a charm, but the point is, don’t let minimums be your maximums as a long-term strategy. Over the course of your life you should endeavor to “Increase good debt (debt that produces income or more assets) and reduce bad debt (debt that only uses cash and does not provide an increase in net worth).”

In summary, delete the negatives while increasing the positives. Combine these strategies with a reduction in total credit usage below 60% and now you are on the fast track. There are always options to open credit lines so no worries here.

By the way, I cover strategies for getting a 800 FICO score in my sold out book “6 Minutes to Financial Freedom.” But no matter where your credit score is today, ” it absolutely can be at least 100-200 points better within the next 12 months.”

In Abundance,

Anson Massey

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