credit score is defined as an expression of a numerical digit based on a level analysis of individual credit files, to determine the creditworthiness of an individual.
Lenders, such as credit card companies, make use of credit scores to assess the potential risk of lending money to consumers and to mitigate losses due to bad debt.
Credit scores are used as a determinant by lenders to determine who can qualify for a loan at an interest rate and credit limits. Lenders also use credit scores to choose which customers are likely to bring in the most revenue.
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Here is how to get a perfect credit score for anybody
1. ON-TIME PAYMENT HISTORY
To get a perfect credit score that will never jeopardize your payment history in the future, all you need to do is never miss a credit card payment at any given time. You might want to pay it off later thinking you’ll get off it, but the truth is that you will end up ruining your payment history completely.
2. Regularly monitor your credit scores for inaccuracies.
when there’s an issue of Identity theft and reporting errors, this might pull down your track record to having a successful and fantastic credit score. To get your free credit score, you will need to sign up for Credit Health so as to enable you to get credit monitoring and credit education tools. To get your credit report, all you need to do is to get it from any major reporting agency once a year for free.
If your report is not accurate due to your discovery, please follow the steps to counter the error. You can do this by sending a written dispute letter to each of the three credit bureaus which are Experian, Equifax, and Transunion.
3. CREDIT UTILIZATION
Utilizing your credit judiciously could get you a perfect score because the credit bureaus want to ensure that you are not in anyway dishing out all your credit cards ad that you are also accumulating a low balance compared to all the balance you have. Having lots of available credit is One of the many tricks that help with this. All you need is to gain a lot of available credit with many credit limits.
4. Be strategic about taking on new debt and closing accounts.
To consider your outstanding loans and credit card balances, a Credit scoring model will help. To have a good score, all you need to do is to make sure your debt load is literally low.
To impact your score, you can apply for new credit and loans, because all lenders will want to do a difficult check every time you want to apply. If you are getting too much difficulty to check each time, it simply means you are requesting more debt than you can handle.
4. LENGTH OF CREDIT HISTORY
For the longest time, you have had credit, starting will be prompt and it is for the better. I will advise young people to always have the urge to start building their credit score at an early age as possible as they can.
They shouldn’t waste time once they have clocked 18 years of age as this will enable them to build a good history and foundation of credit history very early.
An important reminder is to tell you that this will be calculated as the AVERAGE length of your credit history and not the TOTAL length. What I’ll advise you is that you should begin building your credit as fast as you can and you should also ensure that you keep the accounts open and in good faith for a period of time.
By doing this, you are building a solid ground of credit history. When it is time to apply, it will not reduce your age and it will not outweigh your score.
5. TOTAL NUMBER OF CREDIT LINES
TO have a higher credit limit, you should have more credit lines which will lower your overall utilization and will also help your score. By showing even more on-time payments, you need to have more credit at your disposal which will help boost your score.
If you have different types of credit of an auto loan, a mortgage, and credit cards, this will give you an added advantage to lenders that you can ultimately control multiple kinds of loans without defaulting on them.
6. NUMBER OF CREDIT INQUIRIES
Going out to apply for credit is always made known to the credit bureaus and it will therefore show on your report as a strong inquiry. This kind of situation allows lenders to keep watch of the number of times you will go and ask for credit.
If you keep seeking credit on a regular basis, this will make you become less qualified to get credit from lenders.
Furthermore, you can lower your average credit length and also drop your score if you go about getting new credit cards.
There are a few free services like CreditKarma or Creditsesame which you can use to check your credit score every week which I will strongly suggest. Both services are WONDERFUL tools to help you update your score each week.
Though they may not be 100% correct in knowing what your score will turn out to be they will be relatively near and it will also provide you a detailed insight into the whole report.