Build a Massive Credit Score
No matter how in debt you are currently, debt consolidation reduction can help boost your credit in the long-run. Here are some other actions you can take to build the highest credit score possible.
- Understand how credit scores are calculated. Unless you know how your credit score is calculated, it's unlikely you'll fully understand how to raise it. Credit scores come from a formula that weights various factors in your credit history. Learn more about this formula and what factors account for the largest percentage of your score. That way, you can focus your attention on improving these important aspects of your credit.
- Regularly review your credit report. A large percentage of credit reports contain errors. Though most of these errors are benign, some are not. In other words, you could have erroneous information on your credit report that is unnecessarily dragging down your score. The only way to know this is to review your report regularly. Always take advantage of your annual free credit reports from the three bureaus.
- Diversify. Creditors like to see that you're responsible with various types of credit, not just credit cards. To diversify your credit history, you might consider taking out an installment loan if you don't already have one. The most common types of installment loans are car loans and mortgages. After you receive debt consolidation reduction services, think about applying for one of these.
- Scrounge up a co-signer. Co-signers can be a huge boon to your credit score, especially after debt consolidation reduction. If you find a co-signer with good credit for a loan, his/her good credit basically transfers over to your credit history. This can be a quick and easy way to tack some points onto your credit score.
- Keep your balance-to-limit ratio as low as possible. Your balance-to-limit ratio is crucial to your credit score. This ratio represents how much of your credit you're actually using. The best way to keep this in check is to keep your credit card balances at no more than 20% of your credit limit. You don't want to appear maxed out.
- If you don't qualify for an unsecured credit card, get a secured card. Secured credit cards can be a great stepping stone to bigger and better things for people with credit challenges. If you can't qualify for an unsecured credit card, apply for a secured card that reports your activity to the credit bureaus. This way, your responsible payment history will be reflected on your credit report. Also look for secured cards that convert into unsecured cards after you demonstrate responsible use for a certain period.
- Consider credit repair. After your debt consolidation reduction program is complete, we can also refer you to a credit repair company to help you rehabilitate your credit.
For the answers to the most commonly asked questions about debt consolidation reduction, see our FAQ page.
