How can I improve my credit score? ?
I have 656 and don’t have any major credit cards open. I have a closed account with less than $3K balance that should be paid by December. Credit site recommended a major credit card. Should I really get one and use it for purchases only to pay off each month? How else can I improve score?
It doesn’t make sense, but the more open accounts you have (with no bad payment histories), the better effect it has upon your credit score. Part of the "calculation" includes available credit and the percentages outstanding. For instance, if you have 5 credit cards with $1000 limits, and you don’t owe anything on them, you have $5000 available credit, which has a favorable impact on your score. So in short, it’s not always the best thing for your credit score to close unused accounts. Leave them open — just don’t use them and get over extended!!
Other ways to improve your score are to always pay on time, and maintain stability in job and residency. Too many short jobs or short term residences have negative effects on the score.
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It doesn’t make sense, but the more open accounts you have (with no bad payment histories), the better effect it has upon your credit score. Part of the "calculation" includes available credit and the percentages outstanding. For instance, if you have 5 credit cards with $1000 limits, and you don’t owe anything on them, you have $5000 available credit, which has a favorable impact on your score. So in short, it’s not always the best thing for your credit score to close unused accounts. Leave them open — just don’t use them and get over extended!!
Other ways to improve your score are to always pay on time, and maintain stability in job and residency. Too many short jobs or short term residences have negative effects on the score.References :
You need to make a decision:
Do you want a high credit score?
Or do you want a big bank account?
Because the path to get one prevents you from getting the other.
If you want to improve your credit score, get a couple of credit cards, run up balances, and pay the minimums.
If you want a big bank account, close all your accounts, pay off all your debts, never borrow money, and save a small fraction of what you make every month.
There was a caller to the Dave Ramsey Show today, who was concerned about her mutual funds because of the weak economy.
When Dave pressed for details, she said she was 71 and that the IRS was forcing her to withdraw from her Roth IRA because of the IRS’s rules.
Turns out, when she and her husband retired 10 years ago, their salary was $60,000/yr, but her Roth IRA had $4,000,000 in it that they can withdraw tax-free (!?!)
When Dave asked her how she did it, she said they never went into debt, put in about $100 a month from when they were 30, and it just grew and grew and grew.References :
Get more cards and accounts but don’t use them much, or pay them off in full every month. Ask for higher amounts, too. ALWAYS pay on time or early. Do not close any of your accounts; just let them sit, empty.References :
A good credit score means that you are good at getting in debt. A person with no debt and tons of money in the bank would have a terrible credit score, but be absolutely credit worthy.
I suggest you check out Dave Ramsy’s books and materials you can get his books at any library (free)References : http://www.daveramsey.com/