You might have received SMS & emails indicating your current credit score. But have to ever tried to understand what is good credit score and how to increase credit score. So, your credit score is one of the most important numbers that indicates your creditworthiness or the likelihood that you’ll repay the money you borrow.
This three-digit number generally range from 300 to 850. The more your credit score, the more likely you can be approved for new and better credit. Having a good credit score also help you in getting easy loans for your personal and professional growth. With “Loanssos” anyone can apply for loan online very ease.
As per the latest reports from FICO, about 21.8% of Americans had a FICO score of more than 800. This creates a record-high percentage of people with credit scores of 800 and more. But you must know how to increase credit score to 800, to avail all these features.
Also Read: Data Analytics Trends to Follow
How Credit Score of 800 can Benefit You?
There are some advantages that you can grasp with your Credit score of 800 or more. So you must know how exactly having an 800 credit score benefit you? Here are the top-three advantages of having a credit score of 800:
- Your applications are more likely considered to be approved: We all know that the credit scores indicate your creditworthiness. Your high credit score helps lenders to identify whether you can repay the money you borrow from them. Along with your other financial information, your credit score allows lenders to increase the chances that they will approve your credit.
- You can easily qualify for lower interest rates: Your credit score is one of the important factors predicting the interest rate on your loans. Having a high credit score of about 800 will help you qualify for lower interest rates and save your lot of money over the life of your loan. This can be easily seen with the larger loans that you repay over a longer period of time, like mortgage and auto loans.
- You’ll avail better credit card offers at very less rate of interest: Regardless of credit score, you can pay credit card balance in order to avoid paying huge amount of credit card interest. A high credit score can help you qualify for credit cards offering a 0% promotional rate on purchases and balance transfers. If you have any credit card in your wallet, you can easily carry a credit card balance and pay it off over time while avoiding extra finance charges on your balance.
How to Increase Credit Score – Factors Impact Your Credit Score
There are various factors on which your credit score depends. You must know all the factors responsible to take your credit score to the maximum value. Given below are some important points for what can a person do to help increase their credit score?
Always pay your bills on time:
All your payments, including your mobile and electricity bill should be paid on time. This doesn’t include only your credit cards bills as all these bills may be reported to the credit bureaus and thus can affect your credit scores.
If you’re facing any issue while paying a bill, contact the lender immediately. The more on-time payments you will do on your credit report, the better and high your credit score will be.
Maintain a low credit card balance:
Generally speaking, keeping your credit card balances below 30% of the credit is considered best for your credit score. So, if the limit of your card is $10,000, it will be best if your balance is below $3,000.
You must always keep your credit card balances even lower to reach and maintain an 800-credit score. Keeping the lor credit score can help you to know how to increase credit score by 100 points or even more.
Avoid too many credit inquiries:
A hard inquiry is placed on your credit report every-time you make an application related to your credit check. These inquiries cost you about 10% of your credit score. Though this is not a large amount, but it can just be the small difference like that between an 800 and a 780.
This difference totally depends on several other information required for your credit report. When you have to apply for a credit card or a loan, collect all the information before to avoid multiple credit inquiries.
Check your credit reports regularly:
Always check your credit report to make sure that your personal information is correct and there is no improper or incorrect account information. You can have a free copy of your credit reports after every 12 months. You can collect your reports by visiting www.annualcreditreport.com. It must be noted that checking your own credit report or credit score regularly will not affect your credit scores.
Also Read: Ways To Reduce And Manage Your Debt
How Much Time is Needed to Get an 800 Credit Score?
Wondering how long does it take to increase your credit score? So, there are various factors on which the time duration required to make a credit score depends. It takes about several years or more to have a credit score of about 800. You need to have a few years for this along with a good mix of credit accounts indicating your experience in handling various types of credit cards and loans.
A good credit score depends on various factors, like major credit cards, a real estate loan, and any other type of instalment loan. These accounts take a few years of time to show that you can easily a handle all your credit responsibilities over a long period of time.
Different Ways to Build Good Credit Score
There is some fastest way to build credit score more. Check out different ways to make your credit score of about 800 from the below points:
Only Borrow What You Can Afford:
A credit card is not just a permission slip to buy things you can’t afford with one-time payment. It is the quickest way to get into debt and experience some credit-related issues.
The best and the simplest way to build a good credit score is to create the habit of charging only what you can afford. This allows future lenders and creditors to know more about you that you’re a responsible borrower. You can easily borrow money and get new credit after showing that you borrow only what you can afford to repay. Not only that, this also prevents your from excessive debt.
One can apply the same rules to loans. You should only borrow loans for what you can pay back. Before you apply for a loan, check your budget to see what monthly payments that you can pay. Also, ensure that your loan payment doesn’t exceed the amount you have demanded.
Avoid using excess amount of the Credit:
Having very low balance in your credit cards is irresponsible, particularly if you have not any plan to pay the whole balance off within the month. Lenders know more about their borrowers who max out their cards and may face problems while repaying what they’ve borrowed.
Your credit score is also affected when you have low credit card balances and even don’t have enough to pay them off. So, in order to avoid all these, it is recommended to keep your balance at a small percentage in comparison to your credit limit. good credit. This helps you to know how to build credit with a credit card having enough money.
Start with Only One Credit Card
Sometimes, you might have a low credit score even after having a credit card. In such a case, you must know why is my credit score low after getting a credit card? It is quite easy for the first-time credit card user to have multiple credit cards within just the first few years of using credit.
It is recommended to be more careful while opening up too many credit cards frequently. The more credit you have, the more you will face problems with your balances and payments. You might have to go through multiple inquiries and too many new credit cards, and this in result negatively affect your credit score.
Pay Your Whole Credit Card Balance on Time
Once you come to know which action is least important to maintaining a healthy credit score? You can work on those factors to get a high-credit score. If you’re only having those stuff for which you can pay later or you can afford to pay, then you may not face any problem with your account. Paying off your balance each month indicates that you can pay your bills and creditors or lenders can lend you money easily.
Also Read: Benefits of a Joint Home Loan
How Can Credit Card Increase Your Credit Score?
You might face problems while rebuilding your credit score or starting it from scratch. It can be quite difficult to get approved for a credit card with a very low credit score. If you have a old credit card, it can easily damage your credit score and make it difficult for you to access a new credit card. That’s mainly occur in situations when you don’t know the best methods to manage your credit cards.
You can apply for any of the various types of credit cards depending on your credit score. So, before you begin the process for your credit card application, check your credit score so that you can apply for the right ones.
Once your score is enough to be approved for new and better credit cards, you can create your secured card if you wish to save money. Your secured credit card issuer can also invite you to upgrade your card and even refund your deposit.
