How To Keep On Track With A Very Good Credit Score
To achieve a 793 credit score, you’re probably disciplined in your financial habits, with solid debt-management skills. You can still increase your score, however, and of course you’ll want to avoid losing ground. To those ends, it’s a good idea to keep an eye on your score, and avoid behaviors that can bring it down.
Factors that affect credit scores include:
. To determine your on a credit card, divide the outstanding balance by the card’s credit limit, and then multiply by 100 to get a percentage. Calculate the utilization for all your cards, and then figure out your total utilization rate by dividing the sum of all your balances by the sum of all your borrowing limits . You probably know credit scores will slip downward if you max out your credit limit on one or more cards by pushing utilization toward 100%. You may not know that most experts recommend keeping your utilization rate below 30% for each of your cards and for all your revolving accounts overall. Credit usage is responsible for about 30% of your FICO® Score.
Timely bill payments. This may seem obvious, but there’s no greater influence on your FICO® Score: Late and missed payments hurt your credit score, and on-time payments benefit your score. Payment history accounts for as much as 35% of your FICO® Score.
. The FICO® scoring system generally favors borrowers with a variety of credit, including both installment loans and revolving credit . Credit mix can influence up to 10% of your FICO® Score.
Don’t Get Old Debt Removed
Having a long history of accounts that you have successfully paid off is good for your credit score and will show that you aren’t a high-risk borrower. Getting old debt removed could potentially harm your credit score since they won’t count toward reflecting a goof payment history.
If you have managed to successfully settle any accounts in your effort to increase your credit score, it would be unwise to have those accounts removed from your file, since they count towards establishing a good payment history.
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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Formulating A Plan To Improve Your 593 Credit Rating
First aid foremost, you need to understand that it takes time for you to build up your credit score. Dont expect it to be improved in the next week or the next month, even if you do everything necessary to improve it.
If you have any negative factors on your credit report right now, including a late payment, a bankruptcy, or an inquiry, you may want to pay the bills now and then wait. Remember that time is your ally, not your enemy. In the end, there is no quick fix for rebuilding a credit score. It takes time.
In formulating a plan to rebuild your credit rating, you need to understand how specific actions that you take will harm or hurt your credit score. For example, will working with your creditor to close an existing account in favor of rebuilding a new one with more favorable terms hurt or harm you?
Here are two factors for you to consider: a change to your credit report will affect your credit score , and your score is based entirely on the figures that are already in your report.
A major question that people have is how long it will take for them to improve their credit score. But heres what these people are missing: there isnt anything you can do to boost your actual score. Instead, you can do many things to rebuild your history of credit, and the healthier your credit history, the more elevated your credit score will be.
You Need A Mortgage Loan
You definitely dont need a mortgage loan to have good credit. However, if you want to max out your credit score, having a mortgage loan with good payment history is a must.
Since a mortgage loan is usually a relatively large loan and more difficult to get than other installment loans such as an auto loan, a mortgage shows creditors you have been responsible enough with your credit to get the mortgage in the first place.
Fair Isaac Corporation, which provides the FICO score, recommends you have a mix of different types of credit accounts. So along with credit cards and installment loans, a mortgage loan is the last piece of the pie to round off your credit mix.
I also want to note I didnt start seeing my credit score go up because of the mortgage loan until about a year later, so it definitely takes some time.
You obviously shouldnt take out a mortgage loan just to get a perfect credit score. But a mortgage loan is normally considered to be good debt, in that interest rates are relatively low and youre financing something that usually appreciates in value.
If you dont already have a mortgage, be sure to fix up your credit report before applying for a mortgage assuming youre ready for homeownership.
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Credit Score Mortgage Lenders
Below is a list of some of the best mortgage lenders for borrowers that have a 593 credit score. All of the following lenders offer conventional and FHA loans, and can help you determine what options might be available to you. If you would like some assistance finding a lender, we can help match you with a lender that offers loan options to borrowers with a 593 credit score. To get matched with a mortgage lender, please fill out this form.
How To Improve A 593 Credit Score
The best approach to improving a 593 credit score is to check the of your free WalletHub account. This will tell you what problem areas to focus on and how to correct them. If your grades are similar to those earned by the average person with a 600 credit score, improving your credit utilization and paying your bills by the due date every month should be among the first orders of business.
There are four ways to improve your credit utilization, which refers to how the balances listed on your credit card statements each month compare to the credit limits for those accounts. You can spend less, make bigger payments or pay your bill multiple times per month to bring down your statement balances. You can also request higher credit limits, but thats harder for you to control.
On-time payments are important because your payment history accounts for a lot of your credit score, and success in this area is directly within your control. The best approach is to set up automatic monthly payments from a bank account. This will at least save your score from taking a hit just because you lose track of time.
Below, you can get a feel for how your credit analysis might look as well as what your other top credit-improvement priorities might be.
593 Credit Score Sample Scorecard:
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Dont Apply For Loans Or Credit Cards For At Least A Year
Once youve paid down your installment loans, I suggest you stop applying for loans and credit cards altogether. By this point, you should have a few credit cards in your wallet, a couple of paid off cars, and a mortgage.
When youre in this position, there is really no need to apply for more credit.
By not applying for credit, you wont get any hard inquiries on your credit report and this helps your credit score. If you need to apply for credit, just keep in mind the hard inquiries will stay on your credit for about a year.
Again, you should be in a situation by this point where you dont need anymore credit.
Tips To Get A Perfect Credit Score
The first thing to keep in mind is that obtaining a perfect credit score takes time.
Its rather easy to remove negative items from your credit report and get a better score, but a perfect score is another story.
Now, assuming you dont have any negative items on your credit report like late payments or a collections account, lets get into the more advanced credit behavior youll need to learn and put into practice.
Keep in mind that all of the steps outlined below are based on my personal experience, not random advice Ive read on the internet.
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Upgrade Visa Card With Cash Rewards
The Upgrade Visa® Card with Cash Rewards is an unsecured credit card and it works a little bit differently than most other cards. Your monthly payment will be fixed, and so will the interest rate. Youll start out with a credit line that can be as high as $20,000 . Your monthly payments will be based on a fixed term ranging from 24 to 60 months. That will ensure that you get out of debt on the card in a specific amount of time, rather than carrying a balance forever.
The card is available for fair credit and above, with interest rates ranging from 8.99% to 29.99% APR. And perhaps best of all, there are no fees for this card whatsoever. That means no annual fee, balance transfer fees, cash advance fees, late fees, return payment fees, or foreign transaction fees. In fact, the Upgrade Visa® Card with Cash Rewards doesnt even have a penalty APR!
Could Inaccurate Credit Information Be Hurting Your Score
The average credit score for Americans is 703 according to Experian, one of the three major credit bureaus. Experian contributes data to compile your FICO credit score.
On the credit score range, 703 is considered a good score. But its not good enough to have a full selection of loan choices when you need to borrow.
Your good credit could use some fine-tuning if you want a higher credit score.
So lets say youve already built a good credit mix, a good payment history, and an established length of credit history as I described above.
If this is true, you may be wondering whats holding you back from achieving a different credit score?
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Getting Auto Loans With A 593 Credit Score
There is no credit score too low to get an auto loan, and you should be able to get one when your credit score is 593, but it will probably have a relatively high interest rate. Before taking out an auto loan, consider whether the potential toll itll take on your finances is worth it or if you can wait until you get your score in the good range.
According to a 2020 quarterly report by Experian, people with credit scores in the range of 501600 had average interest rates of 16.56% on their used car loans and 10.58% on new car loans, whereas people with credit scores of 781850 received average rates of 3.80% and 2.65%. 10Waiting until your score improves could save you hundreds of dollars each month and thousands of dollars over the life of the loan.
If you need to buy a car before your credit improves, then consider getting a used car that you can pay for upfront.
If youre set on getting an auto loan with bad credit, then you should pay as large of a down payment as you can afford and consider getting prequalified or applying for a preapproval from your bank or credit union to increase your bargaining power.
A Good Credit Score Is In The Eye Of The Beholder
Although the FICO and VantageScore charts above display a general idea of how lenders may interpret different credit score ranges, lenders and other companies can, and often do, differ in their opinions of creditworthiness.
For example, just because youre considered to have a good credit score to an auto dealer doesnt mean a mortgage lender would consider that same score to be a good credit risk. Each lender has their own criteria for credit scoring as well as their own thresholds for a good score vs. a bad score.
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How To Increase Your Credit Score
Now that you know a little bit more about credit scores, you might be motivated to increase yours. Luckily, there are many ways that you can work to improve your score. Dont be discouraged if youre unable to increase your credit score overnight. It will take some time, but it will happen with intentional steps.
Why Is It Important To Have A Good Credit Score
There are several reason why itâs important to have a good credit score. If youâre hoping, for example, to take out a mortgage to buy your own home one day, your credit score will need to be in good shape to get accepted and to get the best rates. Having a good credit score also means youâre much more likely to get the best rates when you take out other credit products. For example, youâre much more likely to get better credit card offers , low-APR loans, and even 0% finance agreements if your credit score is good. If your credit score isnât good, though, it doesnât necessarily mean you wonât get accepted for credit. However, lenders will view you as more of a risk, and as a result your interest rates will probably be higher, and any purchase or balance transfer offers you get will probably be shorter. Before you apply for anything, itâs always a good idea to check your eligibility and see your chances of being accepted.
What Affects Your Credit Score
While it’s useful to know the specific behaviors in your own credit history, the types of behaviors that can lower your credit score are well-known in general terms. Understanding them can help you focus your credit score-building tactics:
Public Information: If bankruptcies or other public records appear on your credit report, they typically hurt your credit score severely. Settling the liens or judgments at the first opportunity can reduce their impact, but in the case of bankruptcy, only time can lessen their harmful effects on your credit scores. A Chapter 7 bankruptcy will remain on your credit report for up to 10 years, and a Chapter 13 bankruptcy will stay there for 7 years. Even though your credit score may begin to recover years before a bankruptcy drops off your credit file, some lenders may refuse to work with you as long as there’s a bankruptcy on your record.
The average credit card debt for consumer with FICO® Scores of 503 is $2,734.
. To calculate the on a credit card, divide the outstanding balance by the card’s borrowing limit, and multiply by 100 to get a percentage. To calculate your overall utilization rate, add up the balances on all your credit cards and divide by the sum of their borrowing limits. Most experts recommend keeping utilization below 30%, on a card-by-card basis and overall, to avoid hurting your credit score. Utilization rate contributes as much as 30% of your FICO® Score.
Tips To Get A Personal Loan With 593 Credit Score
As mentioned, it can be harder to get approved for a personal loan when your credit score is around 593. On the bright side, there are some ways to increase your chances of being approved for a loan quicker without having to apply for dozens of loans through the process:
Personal Loan Requirements
Apart from ones credit score, there are several requirements that determine if one is eligible for a personal loan, such as the following :
- Age: 21 to 60 must show proof of birthday.
- Employment: Must show proof of employment must be with current employer for at least one year or have been self-employed for at least two years.
- Proof of Income: Provided by W-2 forms, tax returns, bank statements, or pay stubs.
- Identification: Proof can be provided by a drivers license or state ID, Social Security, and/or a passport.
- Verification of home address: Can be provided by utility bills or copy of lease.
Depending on the lender, there may be additional requirements or specific details asked apart from the above, such as certain information about your employer, your contact details, your previous address, your college/university name and major, and the like.
Alternative Option to a Personal Loan: A Credit Card
Improving Your Credit May Save You Money
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