Credit Repair

3 New Strategies to Achieve a Perfect Credit Score

When it comes to achieving a perfect credit score, you may already have come across plenty of strategies that are widely available over Internet. Some common strategies that people always suggest include asking for lower interest rates, never maxing out your credit cards, closing old credit card accounts, and many other such things. But, it is very important for you to keep in mind that with the enactment of new regulations earlier this year, the rules have changed dramatically. The old strategies may not work anymore. In the current fast-changing credit environment, you can try the following five new strategies to achieve and maintain a healthy FICO score.

You Need More Credit Cards

Gone are the days when opening new credit card accounts would hurt your credit worthiness and leads you to huge . Though these things are still true, but now that the rules have changed, you need to look at it with a new perspective. There are three things that you need to keep in mind in this regard – first, 30% of your FICO score is determined by credit utilization, only 10% is determined by new credit, and 15% is determined by your credit history. This way, if you are having very few credit cards (or worse no cards at all), you are actually ignoring the crucial component of credit utilization, which makes up to 30% of your FICO score. Experts say that in the changed circumstances it is always better to have at least 4-5 credit cards instead of just one or two. But, it does not mean that you should get the additional 2-3 cards just tomorrow. You have to execute this strategy over time. For example, if you are applying for a new card tomorrow, you can apply for the next one after six years. When it is about achieving a perfect credit score, do not look out for quick fixes because there are no quick fixes as such.

Do Not Request For Low Rates

You may be wondering why. The reason is that these days when consumers request the credit card issuers for low rates, the issuer first does an in-depth account review. In most cases, the companies do this review with an intention to find some reasons so that they could actually raise the interest rate. If they find something they do not like, they may even cut down your credit limits. This way, asking for lower rates is actually asking for troubles; you probably already have a full quota of troubles and you do not want more.

Do Not Pay Off the Balance on a Closed Card

Not many people know that when it comes to calculating credit utilization ratio, the credit limits of the closed accounts are counted only if there is a balance on those accounts. Therefore, by paying off the balance on such accounts, you may actually hurt your FICO score. On the other hand, when you have a card with a $10,000 limit and have a $100 balance on it, it will actually help with credit utilization. This is crucial because credit utilization makes up to 30% of your FICO score.

Overall, as we can see, things have dramatically changed now. If you follow the above three strategies thoroughly, it will definitely put you on a smoother path to achieve a .


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Posted in Credit Repair, Credit Score, Improving Credit Score | 5 Comments »

5 Responses to “3 New Strategies to Achieve a Perfect Credit Score”

  1. Abel says:

    What is Legal Credit Repair?

  2. Jack says:

    Legal credit repair companies will function within the bounds of the Credit Repair organization act (CROA). They will not charge any thing for their services .They will tell about your rights to obtain a credit report and dispute incorrect information on your own. Legal credit repair means that you will receive a copy of your bond before you agree to the services. You can cancel your bond three days after signing it if there will be any changes in your mind.
    Legal credit repair companies will not do anything that is prohibited by the Credit Repair organization act (CROA). This includes that you have to create a new identity, lying about the legal credit repair services they can provide, and asking you to ignore your CROA rights. A company that does any of these things does not provide legal credit repair.

  3. abel says:

    What are the possible ways that I can search my name in cibil defaulters list?

  4. scott says:

    How much fees will be charge to apply for a loan?

  5. john says:

    Very Informative. This article has proved its title absolutely true. It’s really a new way to achieve a good credit score. The percent of Credit utilization plays an important role in your credit score so we should try to improve this field by having more cards in our wallet. This should be our long run strategy. It can not be achieved in a short span of time because short cuts may be dangerous. The point mentioned in the article of not to pay the balance is really breathtaking, but the explanation is good. If we have the balance with in our credit limit, it will be good to show the utilization. We can try these new tips and get a good credit score.

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