Having an optimum credit score in all walks of life can open many doors for loans or for purchasing homes and vehicles.
Here are some of the best ways you can build up your credit score, or if you find them overwhelming, you can seek the help of Credit Repair of Tampa to help you get through it.
Limit Your Hard Inquiries
There are two types of credit inquiries on your credit report. One can hurt your credit score, while the other does not.
Soft Inquiry: This inquiry doesn’t affect your credit score, so you shouldn’t be concerned. You may find it in a credit report, employers check your credit report, or use a credit monitoring service to do so.
Hard Enquiry: This inquiry can affect your credit score (but not always). Hard inquiries include applying for a credit card, a car loan, etc.
It is essential to keep in mind when you get credit inquiries that a hard inquiry shows you are applying for credit, while a soft inquiry only looks at your credit report for other reasons.
What are too many queries? It will help if you keep hard inquiries under two for any two years. After two years, hard inquiries are no longer counted on your credit report.
This tells lenders you aren’t actively seeking credit. After three or more hard inquiries, your credit score may decline.It takes only a few points off your credit score to have too many hard inquiries.
Maintain a Mixture of Credit Account Types
On your credit report, there are four types of credit accounts, and the category dictates how much of an effect it will have on your credit score.
- Real Estate Loans
- Installment Loans
- Credit Cards
- Retail Cards
It doesn’t mean you should cancel your credit cards; it only means that a real estate loan will have a more significant impact on your credit score than a credit card or a retail card. It’s best to keep a mix of these different account types.
Keep One Major Credit Card Account
It may be difficult for people with poor credit eventually, but this is something to aim for.Having a credit card shows that you have enough trust to be given a credit card.
This will improve your credit score. So, keep this in mind if you have bad credit: work towards getting a credit card that you can use.
Keep Old Accounts Open
People repeat the mistake of closing old accounts that they think will help their credit score.This is often because of a late payment on the old account. This late payment will not “disappear.”
When you close an old account, you stop the buildup of account history.Your credit score is based on significant factors, and your credit length contributes 15 percent. Old accounts continue to build a credit history, and this is a good thing! Over time, your credit score will improve.Credit Repair of Tampa know all there is about improving credit scores effectively.