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Improve Your Credit Score In 2016

13 January 2016
Pay your bills on time. Your payment history – including the ones you pay late or skip altogether – makes up a whopping 35% of your FICO score. Take it up a notch: If possible, pay your bills twice a month. Make one payment just before the statement closing date and second one right before the due date. ---  By lowering your total balance owed, you lower the total amount of interest you pay, and improve your credit score at the same time.

Under-use your cards. Your “credit utilization ratio” should be no more than 30% and ideally even less.

Don’t close unused credit cards accounts. Canceling a card can actually lower your score. For more info about how that happens, read one of my previous posts. A better strategy is to occasionally use your older credit cards so the issuer doesn’t stop reporting your information to the credit bureaus. Having a long credit history helps increase your score—so remember that hanging on to older cards is a good idea.

Strategically Open Accounts:  Applying for credit should be done sparingly, because applications result in a hard inquiry on your credit report. Recent hard inquiries will dock your score a few points, so the more there are, the more points you lose.

Be sure to have a good mix of credit types. Lenders like to see that you can manage different types of credit and handle multiple accounts at once. In addition to you rplastic, apply for a small, short-term installment loan (one with fixed payments and an established due date) from your bank or credit union and pay it back over 12 months or less. Adding installment credit to previously established revolving credit lines could hike your credit score as much as 30 points.

Dispute errors and check balances!

-Write a letter offering to pay the remaining balance if the creditor will then report the account as “paid as agreed” or maybe even remove it altogether. (Note: Get the creditor to agree in writing before you make the payment.)

- Erase any dings. A technique, arguably a bit sneaky, is to dispute old, negative information on your credit history in hopes that the original creditor won’t respond and the mark will be removed.

You can file a dispute online through each of the credit bureaus’ websites:

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