Looking for fresh ideas to raise your credit score? If you’re really working to raise your credit score, there are lots of ways to do it – some take longer than others, and some will raise your score reasonably fast and don’t take nearly the amount of time and effort that you would expect.
What is it? Well actually it’s pretty simple and straightforward – take a good hard look at your credit usage. That’s right, your credit usage, or the amount of available credit that you have at any given time. It’s calculated as a percentage of the total credit available to you vs. the total balances that you’re carrying on your accounts.
For example, let’s say that you have one credit card and the limit is $500.00, but you owe $300.00 to the credit card company, meaning that you only have $200.00 available credit on that card. Calculated as follows, this translates to a credit use of 60%:
$300.00 / $500.00 = .60 or 60% of available credit
Your credit usage is normally shown as about a third of your credit score, so if you can reduce the open balance on your account to around $100.00, then your credit usage will fall to 20% and that is well below the recommended 25% credit usage.
And how do you reduce your credit use?
There are actually two ways to do this – the first is pretty obvious and is probably the best way. Simply pay down the balance on your card(s) until you get them below 25% of your total credit usage. (Incidentally, right now is an excellent time to do this, especially if you recently received your tax refund!)
The other way to do this is to apply for credit elsewhere, and assuming that you’re approved, keep that balance extremely low until you can pay down the other account(s). A friend of mine actually raised her score quite a bit this way – instead of another credit card, she opted to apply for a Fingerhut FreshStart account, and after she’d met the initial requirements to have the account converted into a regular account, her credit line was increased several times. Now she has far more “available credit” than she will ever use AND a greatly improved credit score thanks to a good payment record and low credit usage.
Think you might want to open a Fingerhut FreshStart account? It’s easy AND most people are immediately approved for a $300.00 credit line.
Apply for a Fingerhut Credit Account (issued by WebBank). Get low monthly payments with no annual fees or overlimit fees. Shop from thousands of trusted brands.