Posts Tagged ‘perfect credit score’

5 Things You Can Do To Achieve A Perfect Credit Score

Who does not want to achieve a perfect credit score of 800? Everybody does, but not all of them succeed. It takes a lot of efforts on one’s part to achieve that kind of score. The first thing that is very important for you to do is to get yourself aware of the factors that actually play an important role in determining a FICO score. Once you know about those factors, you just have to prepare your strategies accordingly. But, the most important thing is that you have to be consistent in your efforts. Following is a brief rundown on five things that can help you achieve the desired goal.

Avoid Late Payments

Late payment on your debts is one of the worst things that can happen to your credit report. It affects your score negatively. Since you are not making the repayment as you promised, it indicates that you are not good at managing your finances and so prospective lenders rate you as a risky borrower. It is very important for you to keep in mind that the entries for the late payments stay on your report for around twenty four months or sometimes even longer. Therefore, if you are serious about achieving a perfect credit score, you must plan your budgeting and other financial affairs in a way that should help you avoid any possibilities of a missed or late payment on your debts.

Avoid Judgment And Bankruptcies

Judgments and bankruptcies are some of the worst negative items that can appear on one’s credit report. They usually stay on the report for at least seven to ten years. There is no way to get those entries removed before that period. You are strongly recommended to be wary of all those credit repair companies that claim to get bankruptcies removed from the report; there is just no legitimate way to do that unless seven to ten years have passed. Therefore, no matter how difficult financial situation you are in and how overwhelming the debts sound to be, you must always try your best to avoid bankruptcy. Bankruptcy may sometimes sound like an easy option to get rid of most of your debt problems, but things in reality are never that easy as it sounds. It may help you to get rid of most of your debts, but it will also ruin your financial future. Your credit score will be negative for a very long time and the recovery process is very difficult. There can be several better alternatives to bankruptcy, such as debt consolidation programs, credit counseling, debt settlement, and others. But, it is important to note that any of these alternatives will work only if you create a healthy budget plan and stick to it.

Do Not Have More Than Two Major Credit Cards

If you want to achieve a perfect credit score, you are strongly recommended not to have more than two major credit cards (Amex, MC, Visa). People often do not realize that even having too many credit cards can be a problem for their credit score. There is an array of benefits of having just two cards. For example, you will find things easy to manage. You will be able to use the same wisely. You will not have much difficulty in paying off the balances. Most importantly, it is not likely to make things ever complicated for you. Just because there is an attractive offer by a credit card company, it does not mean you must have it. Always remember, whatever decision you take must be based on reasons, not on intuitions.

Achieve Diversity Of Credit

Diversity of credit also plays a crucial role when it comes to achieving a perfect credit score. Therefore, you should also focus on managing the types of debts you owe. If you have different types of debts outstanding in your name with not very high balances and if you are paying all of them in a timely manner, you will see a significant boost in your credit score within a very short period of time. For example, people with a mortgage loan, auto loan, a couple of credit cards and other debts have better chances to strengthen their credit situation.

Credit Card Balances Must Not Be Higher Than 15%

You are also strongly recommended to keep your credit card balances to less than 15%. Maxing out on credit cards (i.e. using the maximum limit) is also a negative factor that causes your credit score to suffer.

Overall, if you follow the above five suggestions and implement the same in practice, there is no reason why you should not be able to achieve a perfect credit score.

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