600 Credit Score
Did you recently find out that you only have a 600 credit score? Don’t worry. You can easily improve your credit rating if you know the tricks and tips we will teach you.
The first thing you need to do is get a copy of your credit report from the three agencies and go through it carefully. If there is any adverse information registered, you want to check these details to make sure they are accurate. Don’t be fooled into thinking that just because they are in print, they are correct. The fact is that many reports filed are wrong. The staff at your bank are human and they make mistakes. You are legally protected in this instance and the bureau holding the report must delete a record if it is in fact an error. You do not need to prove it is wrong, the finance company that reported it must prove it is correct. So that is the first step you take to improving a 600 credit score.
While you are entitled to a free annual credit report, you do not have any entitlement to a free credit score check. For this reason, it is worth paying for the three credit scores you will need. So today go buy a
Transunion credit score
Equifax credit score
Experian credit score.
Why do you need all three? Well each agency calculates your score in a slightly different way so it makes sense to see how you do with each bureau. The credit rating bureaus do not always hold the same information on file either which is why you need to write to the relevant one when querying an entry on your record.
Why is a 600 credit score a problem? The fico credit score is only one way in which a lender will assess the risk of lending you money but a low score can indicate that you will not repay your debt. Financial institutions are suffering badly during this economic recession – partly because they shouldn’t have agreed the loans they did make and partly because their clients are losing their source of income. So if they access a new case and you show a poor score they will either refuse to lend you the money or they will lend it to you but only at a much higher interest rate. This is done in order to protect the bank against the cost of recovering the money if you do not pay.
So how can you increase your 600 credit score?
1) Pay down the balances on your existing cards. The nearer you are to maxing out your available credit, the lower your score will be. So make a conscious effort to clear some of that debt.
2) Pay your bills on time. It is not just your credit card debts that are assessed but all financial records held on you. So don’t be late with the loan or mortgage payments either.
3) Only take on debt you can afford. Think about why you want to borrow more money. Do you really need that new car? Are you taking on a loan to pay for a holiday? The repayments will still be there long after the tan has faded.
4) Don’t make too many credit applications at a time as this will lower your score.
5) Don’t close too many old accounts even if you have paid them off. You need to show a record of being able to repay your debts. If you do close an account, make sure it is marked closed at account holders request so future creditors can see that you did pay back that cash.
Hopefully you will now see that a 600 credit score is not the end of the world and with a little work and effort you can increase it. Every little helps especially when it comes to improving a credit rating.