How To Use A Card Properly To Boost Credit
Remember that your credit card is a tool hat helps you building a better credit and it requires good timing and a discipline.
First, you should never carry a balance on any of your cards. You should get a rule to pay your bill before the deadline, it is better to pay the same day when you got a statement.
Your credit card utilization ratio is one of the most important metric in your credit score formula. You should be using only 7-10% of your available credit limit. For example, if your credit limit is $300 , you should never be using more than $20-$30 of your credit limit every month.
How can you achieve this? Just refill your credit card before the day of the report on the card. You should refill it with the full sum of your credit limit minus 7-10% of it. In our example, if in the current month you have spent $200 on a card with a $300 limit, you should refill your card with $170-$180 before the card report strikes.
Which Credit Reference Agency Should I Use
All three agencies should hold the same basic information such as whether youre on the electoral roll at your current address and how much you currently owe lenders, but its likely therell be three slightly different versions of your credit report.
This is because the amount of personal data in a credit report is growing, with individuals and companies starting to share more information about payment habits but not necessarily to all agencies.
For example, Experian Boost allows you to share data on regular payments such as your council tax bill and Netflix subscription to help boost your Experian credit score.
So as the information held on you can differ between the credit reference agencies, its best to check all three.
You can do this for free and see a basic version of your report or you can opt for a paid subscription for more detail. After a 30-day free trial, Experians CreditExpert account and Transunion charge £14.99 a month, while Equifax costs £7.95 a month.
There may be some instances where youll need to use one particular agency. For example, you may apply for a mortgage with a particular lender which uses Equifax to check your credit report. If so, you should check if your Equifax credit report is up-to-date and accurate to boost your chances of getting approved.
Keep Your Credit Utilization Ratio Low
When rebuilding credit, a key number is your credit utilization ratio, which encompasses your total credit card balances divided by your total credit limit. Having a utilization ratio below 30 percent makes you more attractive to lenders, indicating you do not max out credit cards.
Ways to decrease your utilization ratio include paying off existing debt and keeping a low credit card balance, as well as piggybacking on the credit account of a responsible user.
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Get On The Electoral Roll
Being registered on the Electoral Roll helps lenders check your address, and makes you appear more settled and stable… especially if you’ve been at the same address for a while. This can mean that you’re more likely to be approved for credit. So if you’re not sure, it’s worth checking.It also helps with their identity verification checks. Take care to be consistent in your applications. For example, make sure you write your name exactly the same every time, and if you have more than one mobile number, always use the same one for your application.
Can You Get A Credit Card With A 530 Credit Score
Credit card applicants with a credit score in this range may be required to put down a security deposit. Applying for a secured credit card is probably your best option. However, they often require deposits of $500 $1,000. You may also be able to get a starter credit card from a credit union that comes with a low credit limit and high interest rate.
Either way, if you are able to get approved for a credit card, it is vital that you make your payments on time and keep your balance below 30% of your credit limit.
See also:7 Best Secured Credit Cards
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Trouble Finding An Apartment
If youâre shopping for a new apartment, thereâs a good chance that your landlord is going to run a background check on you before offering you a lease. Some lenders, depending on where you live, may check your credit report to make sure youâll pay the rent on time each month.
If a landlord checks your credit and sees that you have a poor credit score, they may decide not to let you rent an apartment. If you live in a hot housing market, you may have to settle for less desirable accommodations because landlords wonât rent to you.
Fico Credit Score Ranges
Heres how to find out exactly where your credit score falls in the range of FICO scores.
- Excellent Credit : With an excellent credit score of 780 or higher you will get the best rates available.
- Very Good Credit : In this range you shouldnt have any problems getting good rates.
- Good Credit : This is a good credit range to be in, but you wont get the very best rates on loans or credit cards.
- Average Credit : Your score could use some improvements, but you should still be able to get decent rates. You can still qualify for most FHA mortgage loans, for example.
- Poor Credit : A credit score in this range means youre higher risk and might have trouble finding decent rates. Youll also get turned down on some credit applications. You could still get some USDA and VA loans if you qualify for those programs.
- Very Poor Credit : Anything less than 580 means that youre very high risk for borrowing. Youll get turned down for almost all credit applications. If you do get approved, the interest rates will be staggering. Dont worry though, this can be fixed!
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How You Can Improve Your Credit Score & Interest Rate
Though youre able to submit a successful request for an auto loan with a bad credit standing, the problem is that interest rates are often higher. You might be able to qualify for a slightly more affordable rate if you pay a bigger deposit on the car in question. You could also attempt to increase your current FICO score.
Listed here are some tips for possibly boosting your credit score before applying for an auto / car loan:
- Join Experian Boost to get your utility and telephone payments counted toward your credit score.
- Get current on as many bills and debts as you can.
- Various creditors are willing to excuse one-time issues and get them wiped from your credit history. Check if this is applicable in your case.
- Request free credit reports, check them out for flaws and contest any that you come across.
Rebuilding Your 530 Credit Score
A Credit Repair company like Credit Glory can:
An industry leader like Credit Glory can guide you through this process. Give them a call @ , or chat with them, today â
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Keep Track Of Your Old Accounts
Some lenders don’t like it when customers have unused credit, in case they use it all at once and then struggle to pay it back. Closing old accounts could potentially improve your credit rating.On the other hand, by closing down a card, youre reducing the overall amount of credit available to you and then it may seem as if you need to utilise a larger percentage of your credit limit just to get by.
Lenders look at the credit limits available to you and how much you use to judge whether you can cope with new credit. If you have an overall credit limit of £1,000 and you use £250 of it, your credit utilisation is 25%. But if you cancel a card and your limit is reduced to £500, youll be using 50% of it already.Accounts that you’ve used responsibly for years is a great sign that you know how to look after your money. As a rule, you should aim to keep accounts with a long history of good repayments.If your memory needs jogging, you can find out if youve got any active credit cards or store cards by checking your credit report. Credit Reference Agencies will keep a record of closed accounts for six years before they are removed from your credit report.
How To Raise Your Credit Score By 100 Points In 45 Days
Insurance carriers use credit scores as part of their calculations to determine the level of risk you would pose to them as an insured. They have found a direct correlation between credit scores and claim activity. Knowing that, it’s important to keep your credit scores in good shape so that your insurance premiums stay in line.
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Plastk Secured Visa Credit Card*
Cards aimed at those with bad credit have traditionally been stark, pared-down products, designed only to help the cardholder repair their credit and without the benefit of rewards or bonuses. The Plastk Secured Visa breaks that mold by offering rewards on everyday purchases along with a worthy welcome bonus.
The earn rate is modest1 point per $1 spentand youll need 250 points for $1 in cash back, making 1 point worth about $0.04. Still, the ability to earn anything with this type of card is a big draw. In addition to using them for cash back, you can redeem your points for merchandise, travel and hotel rewards, or gift cards. And you wont be starting from scratch: The Plastk Secured Visa gets you started with a welcome bonus of 5,000 points plus 0% APR for your first three months.
More reasons to slide this into your wallet: The Plastk card offers a slightly-below-average interest rate of 17.99% theres an easy payment system with Interac e-Transfer and you get monthly updates of your credit score, so you can track your progress. and because its a Visa card, its widely accepted.
There is no minimum income requirement. Instead, to use the card, youll have to make a security deposit of $300 to $1,000.
- Annual Fee: $48
- Sign up bonus: 0% interest rate for the first 3 months and 5,000 rewards points
- Perks: Earn a base of 1 point per $1 spent
- Min. Deposit: $300
Can You Still Get A Mortgage With A Less Than Healthy Credit Profile
Getting a mortgage with bad credit is tricky, but not impossible. In the past, there were a number of lenders who used to specialise in offering adverse credit or sub-prime mortgages to borrowers but the new rules mean that these lenders have now largely disappeared. It does not mean that there are no options at all for those with bad credit as long as the affordability rules are still met.
The exact credit profile you need to apply for a mortgage varies from lender to lender. The concept of bad credit is subjective and this is because expectations vary between lenders, while one might approve you, another might reject you regardless of any credit issues. This is because the lenders have different business models and target different risk demographics of the lending market. For all mortgage applications, you will still need to show sufficient income levels for the required borrowing before a lender will offer you a mortgage.
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What Does A 530 Credit Score Mean And How It Affects Your Life
Scores below 530 are generally considered as low. No one wants to part away with their money especially when they have any reasons no matter how slight it is to doubt the person who wants to borrow from them.
In reality you may not be a bad debtor. You may actually be a credible person indeed but a low credit score will present you to a potential benefactor as a person that cannot be trusted to pay back.
You dont have to risk being denied the opportunity to get credit cards as well as loans. In the rare occasion when you even get loans, you will end up being subjected to having to pay a high interest not because you are a bad person but because your credit score is low.
What happens if you improve your 530 credit score by 50 or 100 points?
Well, an improvement in your credit score comes with a lot of unprecedented benefits. It opens up for you doors of opportunities that have once been slammed on you.
An improved credit score shows to a potential creditor that you have become more responsible with the way you go about handling money. An increase in your 530 credit score notifies your potential benefactor that you are now way more credible than you use to be.
It gives your potential lender a kind of guarantee that money given to you is not thrown away but has been handed over to someone who will manage it well and pay back as promised. Simply put, it rings a lot of positive bells around your personality.
and if you dont?
Who Calculates Your Credit Score
Your credit score is calculated by a credit reference agency . There are 3 CRAs in the UK: Equifax, Experian and TransUnion. At ClearScore, we show you your Equifax credit score, which ranges from 0 to 700.
Each CRA is sent information by lenders about the credit you have and how you manage it. Other information, such as public records like the electoral roll and court judgments, are also sent to the CRAs and form part of your credit report.
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Average Credit Score By Region
Want to know what your neighbourâs credit score looks like? Experian released the average credit scores by location. The worst credit scores in the UK on average are:
1) Kingston-upon-Hull – 696
2) Blaenau Gwent â 702
3) Blackpool â 709
4) Merthyr Tydfil â 712
5) Middlesbrough â 713
6) Northeast Lincolnshire â 717
7) Knowsley â 722
9) North Ayrshire â 737
10) St. Helens â 744
And the best average credit scores can be found in:
1) Isles of Scilly â 881
2) Wokingham â 877
7) St Albans â 871
8) South Cambridgeshire â 867
8) Brentwood â 850
10) West Oxfordshire â 844
You can find out what the average credit score is where you live by heading over here.
What A Fair Credit Score Means For You:
Borrowers within the “fair” credit score may push interest rates higher for their lines of credit. Borrowers in this range may incur higher charges associated with a loan or line of credit. It may be difficult to obtain a 30-year mortgage at the lower end of this range and you may expect higher interest rates. Auto loan APRs may have higher rates and credit cards may have lower limits and higher APRs.
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The Problem With Credit Scores
Theres no such thing as a universal credit score. Each lender has its own system to score and decide whether or not to accept you as a customer, meaning you could be turned down by one, and successful with another.
But to give you a better idea of how your application might be viewed by lenders, credit reference agencies produce their own version of your credit score.
The higher this number, the higher your chances of getting the best credit deals but a good score from a credit reference agency is no guarantee your application will be successful.
Lenders might check one, two, or all three agencies before approving your application, so its important to ensure your score is in good shape with all three. This can be tough as each credit reference agency might collect slightly different information and will have its own way of scoring.
Equifaxs credit score scale change brings it almost in line with Experians which ranges from 0 to 999 but you still might find it confusing as the bands dont correlate and TransUnions credit score only goes up to 710.
For example, a score of less than 560 is very poor with Experian and poor with TransUnion but good with Equifax.
- Find out more:are you in the dark about credit scoring?
Harder To Qualify For Loans
One of the most obvious effects of having poor credit is that it can make it more difficult to qualify for loans.
When you apply for new credit, whether itâs a mortgage or a credit card, lenders will take a look at your credit report. They want to make sure that you have a good track record and are likely to repay your debts.
If you have poor credit, odds are good that youâve missed payments in the past, have bills in collections, or have a bankruptcy in your history. Lenders that see these things in your credit report might not want to take the risk that youâll miss payments on a new loan.
In some cases, you can get trapped in a cycle of applying for a loan, getting denied for poor credit, and having the application show up on your report, dropping your score further. When you go to apply with a different lender, youâll have an even worse credit score when the lender examines your credit report.