As a follow up to Part 1 there are 14 ways you can get your credit scores into the 700 + club. This will allow you as a small business owner to get the unsecured business lines of credit or small business loans you need. Here are the final 7 ways you can get your scores over 720:
Push back against lower limits. These days, Credit card issuers are reducing limits right and left. In fact, risk-averse companies have reduced more than half the $5 trillion in credit limits that existed before the financial crisis. This can be awful news for your credit scores, but you can push back. If you can’t get the issuer to reverse its decision, try to move your balance elsewhere.
Move debt to installment loans. Credit cards are best used for short term purposes. If you’ve got high balances that you can’t pay down short term, consider transferring the debt to a personal installment loan. The FICO scoring model treats installment loan balances more kindly than credit card debts.
Play the home equity card cautiously. Moving a credit card balance to a home equity loan or line of credit (HELOC) may improve your scores but can put you at greater overall financial risk. If you fail to pay the bill, you could lose your home.
Don’t close accounts or let them be closed. Closing accounts can’t help your scores and will likely hurt them. Many issuers these days are closing inactive cards rather than continue to carry the accounts. If you’ve got cards you haven’t used in a while, take them out for dinner or a movie, and pay the balance promptly. Better yet, use them to charge a regular expense, such as your electric bill, and arrange for automatic payments.
Apply for credit sparingly. Applications for credit don’t ding your scores as much as some people fear. But when you’re in the market for a mortgage or a car loan, you don’t want your credit report full of inquiries. Wait to apply for any other credit until you’ve secured the loan you want.
The lower your scores, the longer it will take to crawl your way back up the FICO scale. But progress is possible, and anyone can reach the 720 mark with a little time by using credit consistently and responsibly.
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