[Infographic]: 10 Fastest Ways to Improve Your Credit Score
Time for a pop quiz. Who do you think would have the better credit score: Someone who has no credit cards or someone who has too many? In the eyes of the three major credit bureaus, both mean you’re an iffy risk.
Here’s another question: Who is a better credit risk – someone who pays their bills on time or someone who pays them off in full every month? The first one. Credit is a double-edged sword. it’s something that’s expected to be used, and yet it’s so easily abused that it can hurt your ability to borrow money at the best rate.
Your credit score is the closest thing you’ll find to a magic formula. It’s more art than science and relies on factors that might surprise you. Call them the Four C’s:
- Capital – how much is in your savings and retirement accounts
- Capacity – your earnings and debt-to-income ratio
- Collateral – what you are borrowing against
- Character – judgments, liens, bankruptcies and even DUIs can impact your score
So how do you improve your FICO score? Here are ten steps.
This article first appeared on Lifehack.
Do you know what your credit score is? Well, did you know that having a ‘good’ credit score can boost your chances of getting a mortgage, a car on finance and even things like a mobile phone contract?