4 Tips to Build A 700+ Credit Score in 2020
What was the most exciting change over the past decade?
The gamification and improved transparency of credit scoring!
Now, for most of you, this may not rank on your Top 10 lists of most exciting things to happen in the last decade, so allow me to make my argument on why it matters.
Ten years ago, we started to see an increase in consumer access to credit monitoring through sites like FreeCreditReport.com. At the time, these sites used an older model of the VantageScore, which had a scoring range of 450-950. This created a lot of confusion, but at the very least, gave consumers access to their credit reports more frequently.
Fast forward ten years and now we have hundreds of credit monitoring sites, with hundreds of credit scoring models. The increased competition within credit scoring and access to credit reports has driven more transparency into how to maximize your credit score and keep inaccuracies and derogatory items off of your credit report.
Looking forward into the next decade, we will see more competition for how mortgage lenders use credit scoring, as well as the first AI generated scoring platform. All of these things will have an impact on you as a consumer, and that’s why it’s important to use all of the available information to maximize your credit scores and ultimately build a healthy credit profile.
4 Tips To Build A 700+ Credit Score:
Gamify Credit Card Utilization: If you know the rules of the game, then credit scoring can become much easier to leverage for your own benefit. One of the biggest factors of the credit score game? How You Use Credit Cards. If you’re trying to build a healthy credit profile, keep your credit card balances below 30% of the available credit limit. If you’re trying to get over that 700 credit score mark, keep a credit card balance of 1-6% of the available credit limit. Do this for a few months before you apply for credit and you’ll increase the likelihood of maximizing your credit score.
Inquires & New Accounts: Avoid excessive inquiries. What is excessive? 12 or more within a calendar year. In addition, make sure you’re not shopping for multiple categories of debt within the same 30 day period. If you’re trying to qualify for an auto loan, avoid new store card applications. If you’re trying to qualify for a mortgage, put your credit report on lock down.
A Healthy Mix of Credit: You don’t have to be 65 years old with perfect payment history to have a 700+ credit score. In fact, you can maximize your credit scores by establishing payment history with your credit cards, an installment loan, and preferably a mortgage. If you only have credit cards or installment loans, creating a healthy mix will help you boost your credit score.
Know Your Rights: Collections and late payments will act as an anchor on your credit score. If you ever see an account that is inaccurate, unverifiable, misleading, or outdated, be sure to investigate the account BEFORE you take action to pay or resolve the debt. Why? 51% of all collections in the U.S. are medical debts. Unfortunately, medical collections report inaccurately at an alarming rate, leading consumers to pay on accounts that will continue to negatively impact their credit scores. Be vigilant, and always investigate derogatory accounts or Fair Credit Reporting Act violations.
We hope this helps as you start your journey towards an 700+ credit score. Be sure to contact us with any questions if you’d like assistance with resolving your credit challenges.
Happy New Year and cheers to healthy credit!