“Credit Score Boost: 5 Surprisingly Simple Habits to Unlock a Higher Score”
A Higher Credit Score Can Unlock a Wealth of Financial Opportunities
Having a higher credit score can open up a world of financial possibilities. Christian Widhalm, CEO of Bloom Credit, recently discussed the factors that affect credit scores and the easiest ways to improve them. In this article, we’ll explore the main points he made and provide practical advice on how to boost your credit score.
For those looking to improve their credit score, Widhalm’s advice is straightforward: “When generating scores, these scores typically take into account certain aspects of your overall credit profile.” The two most significant factors are positive repayment history and credit utilization.
Repayment History: 35% of the Score
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Positive repayment history accounts for 35% of your credit score. This means that your ability to make timely payments is crucial. Widhalm emphasizes the importance of paying bills on time and avoiding late payments. “Do you actually pay your bills on time and not be late?” he asks.
Credit Utilization: 30% of the Score
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The second most significant factor is credit utilization, which accounts for around 30% of your credit score. Widhalm uses a simple example to illustrate the impact of credit utilization on your score. Suppose you have a $10,000 credit limit on your credit card, but your balance is $9,000. That’s 90% utilization, which is considered high and may lower your credit score.
Easiest Ways to Improve Your Credit Score
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So, how can you improve your credit score? Widhalm offers two approaches:
1. Open up credit products responsibly: By opening up new credit products and controlling your utilization, you can improve your credit score. Make sure you’re not applying for too many products at once, as this can negatively impact your credit report.
2. Take advantage of new credit-building products: New credit-building products are becoming available, which can convert other types of payments, such as checking account statements, rent, telecom bills, and utility payments, into real trade lines. This can have a significant impact on your credit score.
Frequently Asked Questions (FAQs)
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Q: How do I improve my credit score?
A: Improve your credit score by paying your bills on time, keeping your credit utilization ratio low, and taking advantage of new credit-building products.
Q: What’s the difference between FICO and VantageScore?
A: FICO and VantageScore are two different types of credit scores. FICO is one of the most widely used credit scores, while VantageScore is another widely used credit score. Both scores range from 300 to 850.
Q: How can I check my credit score?
A: You can check your credit score for free through various websites, such as Credit Karma, Credit Sesame, or through the website of one of the three major credit reporting agencies: Equifax, Experian, or TransUnion.
Conclusion
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A higher credit score can unlock a wealth of financial opportunities. By understanding the factors that affect your credit score and taking advantage of easy ways to improve it, you can achieve financial freedom. Remember to pay your bills on time, keep your credit utilization ratio low, and take advantage of new credit-building products to improve your credit score. Start making the most of your financial situation today!
