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How to increase your credit score quickly

Corey —  February 18, 2013

Lately I have been talking about how we want to buy a new house a lot. I think about it everyday and I find myself looking at houses everyday also. I’ve pretty much looked at all of the houses within a 60 mile radius of where I want to be.

I have seen a lot of houses that I like, but none that are perfect. I have literally browsed through thousands of houses. Right now I feel like I’m at the point that if I find a house that I absolutely love, I don’t know if I can wait until the end of 2013 or the beginning of 2014 to buy it. I mean, how could I wait? I haven’t found the perfect one yet so I definitely do not want to let the perfect house escape from me.

There are many things that we need to do before we buy, but we especially want to make sure that our credit scores are as perfect as they can be. Right now we are in the mid 700s and it would be higher if we wouldn’t have taken out a couple of 0% loans (we took them out just because they were 0%, we just let the cash sit in our bank because we believe that’s a better gain).

So, since we are focused on increasing our credit score and we plan on buying once the perfect house comes along, we need to really buckle down and make our credit score as good as it can be so that we can be ready to officially start the home buying process. Every little thing helps and even a couple of points higher would make us very happy.

How to quickly increase your credit score:

1. Check and fix any errors in your credit report.

When was the last time that you checked your credit report? You should do this at least once a year and make sure that there are no errors and that all of the information listed is correct. A small error might be drastically affecting your credit score, so check now! I recently ordered both of our credit reports from the 3 major agencies (all for free of course) and found that everything is correct now.

Everything being correct on our credit reports is a big deal because a couple of years ago I found out that someone had bought a house under my name when I was only 13! I had just found out about it because it was buried in my credit report and I had never looked hard enough. Definitely a big mistake.

2. Watch your utilization rate.

Pay down those high balances that you have. The balances that you have on your credit cards account for approximately 30% of your credit score. You want your balance to be below 30% of your total available credit. So if you are allowed to put up to $1,000 on your credit card, do not charge more than $300. It is also said to try and keep this amount below 20% in order to have an even better credit score.

This is something that we are really working on. I recently paid off a ton of credit card balances. We never carry a balance over and we always pay it off completely, but even with that, if you do not keep your utilization rate below 30%, it can still hurt your score even if you are paying your FULL balance off every month.

3. Keep all accounts open.

Recently my fiancé, “W,” was fooled into opened up a store credit card in order to save $25 off of his purchase.

Yes, I said $25 and that was all it took to entice him to sign up.  Trust me, he will never do that again! I thought about closing it immediately but I do know that closing it will only hurt his credit score and our ability to get a great interest rate on a mortgage. So, for now, we just plan on keeping it open and using it occasionally just so that it will help our credit score.

Closing a brand new credit card so quickly will most likely not have a positive effect on our credit score.

Are you trying to increase your credit score? What tips do you have?

In Miscellaneous ,
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Key points to consider when choosing a credit card

Corey —  August 13, 2012

Choosing the most adequate credit card for your needs has never been an easy task, given the large number of options available and the difficulty understanding the exact terms and conditions of each product. In the current climate of economic uncertainty, making the right decision is more important than ever, so as to avoid getting into further financial difficulties.

To help consumers with that decision, we have listed the four main points to consider when choosing a credit card.

1- Consider your spending habits

This is a basic element to consider, as overlooking this point could result in being stuck with the wrong credit card. It is essential to have a clear idea of the amount of money that you will be charging to your credit card every month. Determining this point will prevent you from choosing a credit card that has the right level of spending limits.

2- Take into account your previous credit history

Having a less-than-perfect credit history does not mean you cannot have access to a credit card. In fact, there are cards specifically designed for consumers in these circumstances. If this is your case, choose a credit card with the lowest standard interest rate possible (although APR rates in these particular cards tend to stand at 30 – 40 per cent), or go for a “bottom-up card”, which allows you to gradually increase your credit limit.

Alternatively, consumers who already have an existing debt may benefit from 0 per cent credit card deals, which allow them to transfer balances from other cards at no extra cost.

3- Low APR rates are not always the best deal

Some consumers are attracted by cards that advertise a low standard interest rate. However, and depending on your individual situation, these cards may not be the best option. Consumers who are able to pay their balance in full every month will not benefit from low APR rates and should not choose a credit card solely on that basis. Additionally, beware of the expression “typical APR rates”, as this means that rates can be modified (and increased) depending on your particular circumstances.

4- What if you can’t pay?

Due to unexpected events, there is a possibility that you might be late paying your monthly balance or that you exceed your credit limit. Credit card providers charge a fee in these cases, so it is important to go for the provider with the lowest fees. Also, ensure that the advertised APR rate will not increase in the event of late payment.

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