Dont Apply For Every Credit Card
Too many credit inquiries in a short period of time can hurt your credit score.This can be difficult to avoid during Christmas, when it seems that every department store is offering you a discount for signing up for its credit card.
Applying for new credit card accounts can account for 10% of your credit score, which isnt a huge number, but it can be enough to push you into the 800+ credit score club.
Holly Wolf, who with her husband has a credit score in the 800 range and is a chief marketing officer at Conestoga Bank, says she doesnt open a lot of credit cards and often closes cards she may have opened to get a store discount.
Honestly, this isnt a lifestyle to which most folks aspire, Wolf says. The need to have a nice car a big house and all the accouterments of prosperity over having a high credit score. Living debt free or with as little debt as possible has enabled us to save for retirement, get the best rates on loans, and be prepared for unexpected expenses when they arise.
Dont Fret If You Dont Have The Highest Credit Score
Credit scores are not fixed theyre constantly fluctuating with everyday actions. Making purchases with your credit card and paying down your credit card balance, for example, affect your credit. Your score is also affected by things you cant control, such as the age of your accounts.
That said, if you reach that perfect 850 credit score, you may not remain there long. But lenders dont particularly care whether your score is 850 or 790, noted credit expert John Ulzheimer, who describes a score of 760 or above as the sweet spot for credit.
Your credit isnt the only factor that affects your eligibility for credit. Your income and whether you own your home can also influence your eligibility, for example.
How Mortgage Rates Can Vary By Credit Score
Let’s see how a 100-point difference in credit scores affects one womans mortgage payment.
For example, suppose a borrower looking to buy a home worth $300,000 has a 20% down payment and applies for a 30-year fixed-rate loan of $240,000. She has a 780 FICO credit score, which gets her a 4% rate. Thats around $1,164 a month, not including taxes, insurance or homeowners association fees.
If this borrowers score dropped by about 100 points to between 680-699, her rate might increase to about 4.5%. At that interest rate, her monthly payment would increase to $1,216, an extra $62 a month, or $744 per year.
The effect of the difference in the rates may not seem significant at first, but added up over years, it could be a lot. In this example, a 100-point-drop has the borrower paying an additional $25,300 over 30 years.
At the same time, its important not to go crazy gaming your mortgage rate. If your score is already good, you should consider taking the rate you qualify for.
Industry professionals advise against taking too long to fine-tune an already-good credit score as rates could go up in the meantime and offset any benefit of a slightly higher score.
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Reduce Your Credit Card Balance
Most experts recommend keeping your credit utilization rate below 30% though those with at or near-perfect credit scores typically keep that utilization rate below 7%, according to Ulzheimer. So, consider chipping away at those credit card balances and minimizing how much you charge if you want to work toward higher credit.
Explanation Of Credit Score Ranges
When it comes to purchasing something that requires borrowing money, your credit score is the three-digit number that tells lenders if you’re a worthy investment or not. Whether you are applying for a mortgage, home loan, car loan or boat loan, lenders will make a decision after looking at your credit score and other information. The higher your credit score is, the more chances you have at obtaining any loan you want at affordable interest rates .
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Can I Get A Personal Loan Or Credit Card W/ A 769 Credit Score
Like home and car loans, a personal loan and credit card is easy to get with a 769 credit score.
You donât need to apply for a secured card with Discover or Capital One, who may make you pay $500-$1000 just for a deposit.
You can get even better terms on your personal loan or credit card by repairing your credit and waiting a few short months until your score improves.
A 769 score means you likely have few-no negative items on your report. Removing any outstanding negative items is usually the quickest way to fixing your report.
We recommend speaking with a friendly credit repair expert online to help guide you through this process. Your consultation is completely free, no-pressure, and will set you on the right path toward boosting your score.
Pay Bills And Eliminate Debt
Make your monthly payments on time and in full as often as possible. The less debt you owe, the higher your credit score will be. Being smart about using your credit card will do nothing for your score if it is maxed out.
Improving your credit to get to a 769 credit score can take a bit of work. Getting a 769 credit score will take time. Your credit score goes up within a year, which inevitably saves you on interest rates. Two of the last two factors are the frequency with which you apply for new accounts and the diversity of your credit portfolio. As a result, opening multiple accounts simultaneously is detrimental to your credit score, while having different types of accounts is beneficial.
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How To Improve Your 769 Credit Score
Knowing how to improve your credit score is a big deal. You want to ensure that your credit is the best out there so that you do not have a problem applying and being granted loans and lines of credit.
Here are some tips to help you maintain or even grow your 769 credit score a bit more than it currently is:
- Always make sure that youre making all of your monthly payments on time, every time.
- You should always pay off your debt as quickly as you can to ensure that you have a boost in your credit.
- Keep your credit utilization to 30% of the available credit that you have overall. This will ensure that you have the best credit utilization and that you are not using too much all at once.
- Dont move the debt around that you have, pay it off and it will move quicker and benefit the score even more.
- Dont keep opening up new accounts every month since this can negatively impact the score and having hard checks done can also bring the score down.
- Never open up new accounts just to increase the amount of available credit, always just use the ones you have.
- Dont own too many credit cards all at once, or other loans since this can become overwhelming and actually harm your credit more than do it any good.
- Keep a comfortable income coming in and budget for expenses going out so that your credit score can benefit from bills being paid.
Measuring Your Credit Score
Measuring your credit score is something that has to be done. Every specific credit bureau has a different way of measuring the score. Some measure to 850 while others will measure to 830 and so on. Each one is different and while one might record one default on their records, another might not and so on.
With the three major credit reporting agencies: TransUnion FICO, Equifax and Experian, you can be sure that you have all of the information you need. Youre allowed to have a free print out of your credit score every year from each of these three bureaus. If youre ever curious about what is on your report or ways that you can find out what you can do to fix your report, printing a copy and reading it is the best way to find out more about it, as well as report anything that shouldnt be on the report.
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Don’t Risk Damaging Your Score
Breaking your good pattern of always paying your bills on time, then suddenly missing payments or only making part payment has the potential to harm your score. These are two red flags to avoid that can raise your credit score and not scare off any card issuers or lenders.
With such an excellent credit score, you wouldn’t want to break your good payment habits or do anything that can put your credit score at risk, like making late payments.
What Are The Benefits Of A Good Credit Score
Making timely repayments of loans and credit card bills can fetch you a good credit score. This has numerous benefits. Here, we have listed some of the major benefits of a good credit score:
1. Low-Interest Rates on All Types of Loans
This is a major benefit when it comes to having a good credit score. Everyone aims to maintain good credit so that loans can be availed at low-interest rates. This can further help in paying off loans faster and reduces a significant amount of financial burden. Even a slight reduction in big-ticket loans such as home loan, loan against property, etc., can save you a lot of money in the long run.
2. Improved Approval Chances for Loans and Credit Card
Every lender first goes through your credit score and reports as soon as you apply for a loan or credit card. This is called a hard enquiry and it can also impact your credit score. The impact can hurt your credit score in case the application gets rejected. However, with a good credit score, the credit approval chances are higher since lenders will not have a strong reason to reject your application.
3. Higher Credit Limits
4. More Negotiating Power
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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.
Credit Score: Is It Good Or Bad
Your score falls within the range of scores, from 740 to 799, that is considered Very Good. A 769 FICO® Score is above the average credit score. Consumers in this range may qualify for better interest rates from lenders.
25% of all consumers have FICO® Scores in the Very Good range.
Approximately 1% of consumers with Very Good FICO® Scores are likely to become seriously delinquent in the future.
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Dispute Any Inaccuracies In Your Credit Reports
Be sure to check your credit reports regularly at the three major credit bureaus: Experian, Equifax and TransUnion. Inaccuracies and mistakes can and do occur, perhaps more often than you realize. If you see errors, dispute the information as soon as possible as they could be dragging down your credit score.
What Does Not Count Towards Your 769 Credit Score
There are many things that people assume go into their 769 credit scores but that actually dont. Examples include how much money you earn, your age, your marital status, your child support payments , how much money you have donated to charity, where you work or live, or your employment history.
None of these things or anything like them do anything at all to your credit score, so instead, focus on the five primary factors that we outlined and discussed above.
Now that you know what counts towards your overall credit score and what does not, you should know exactly what you need to pinpoint in order to enhance your score. For example, maybe one reason your credit score is low is because youve opened several new accounts of credit.
Regardless, its important at this stage for you to positively identify what it exactly is that is lowering your credit rating. Once you have identified what that is, you can start to formulate a plan.
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Credit Score Is It Good Or Bad How To Improve Your 769 Fico Score
Before you can do anything to increase your 769 credit score, you need to identify what part of it needs to be improved, plain and simple. And in order to identify what needs to be improved, you should probably be aware of all the things that count and dont count towards your score.
How To Keep On Track With A Very Good Credit Score
Your 769 credit score means you’ve been doing a lot right. To avoid losing ground, be mindful of avoiding behaviors that can lower your credit score.
Factors that can have negative effects on Very Good credit scores include:
Utilization rate on revolving credit Utilization, or usage rate, is a measure of how close you are to “maxing out” credit card accounts. You can calculate it for each of your credit card accounts by dividing the outstanding balance by the card’s borrowing limit, and then multiplying by 100 to get a percentage. You can also figure your total utilization rate by dividing the sum of all your card balances by the sum of all their spending limits .
Most experts recommend keeping your utilization rates at or below 30% on individual accounts and all accounts in totalto avoid lowering your credit scores. The closer any of these rates gets to 100%, the more it hurts your credit score. Utilization rate is responsible for nearly one-third of your credit score.
Late and missed payments matter a lot. More than one-third of your score is influenced by the presence of late or missed payments. If late or missed payments are part of your credit history, you’ll help your credit score significantly if you get into the routine of paying your bills promptly.
37% Individuals with a 769 FICO® Score have credit portfolios that include auto loan and 38% have a mortgage loan.
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How Credit Score Affects Your Mortgage Rate
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Without a high credit score, you wont qualify for the best mortgage rates available, which could mean youll end up paying more money over the term of your mortgage. The difference between 3% and 3.25%, for example, can add up, especially if youre applying for a 30-year fixed-rate mortgage.
Key Things That You Must Know About Credit Score
If you are new to the concept of credit or CIBIL score, you may have several questions about how it works, what impacts credit score, etc. Here are some of the additional aspects you must know about credit score.
1. You can check your credit score and get a credit report for free
Most credit bureaus and third-party websites provide credit scores for free. You can sign up with them and check your credit score for free at any time. It is good to check your credit score frequently to keep a close watch on your credit health. While checking your credit report, you can look for any errors and get them resolved by raising a dispute with the credit bureaus.
2. Not everyone has a credit score
A credit score is available only after an individual takes some form of credit from banks, NBFCs or online lenders. This can include credit card, personal loan, home loan, two-wheeler loans, loan against property, gold loan, car loan, etc. If you have never borrowed before, you would not have any credit score.
3. Factors that Make your Credit Score
If you are wondering how a credit score is calculated, you must know that it is based on factors such as your repayment history, credit utilisation ratio, credit age, credit mix and number of hard enquiries, etc. You will have a good credit score if you have a good combination of all of these factors.
4. It takes time to build an excellent credit score
5. Poor credit score can be improved
6. Checking your own credit score doesnt hurt it
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Take Responsibility For Your Credit Score
As you can see, taking action and being responsible in your 20s can help you build your credit over time. So, refer back to this guide and start improving your credit score now. And, just think: This will help you land that apartment, buy a new car, or get your first rewards credit card. Are you ready to improve your credit score in your 20s and start adulting?
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal and accounting advisors before engaging in any transaction.