An exceptional credit score can save you a lot of money by lowering interest rates and fees, but reaching 800 can be a big climb.
SAN ANTONIO – Your credit score isn’t just a number. It is one of the most important numbers you have. It ranges from 300 to 850. The magic number for getting lower interest rates and more credit approvals is 800.
“If you have a credit score of 800 or higher, it will save you money,” said Matt Schulz, chief credit analyst at LendingTree.com. “It saves you money in the form of lower interest rates on mortgages, credit cards, car loans. You could face less expense. It really does make a difference, what is your credit rating on the terms you get for the things you apply for and it will save you a lot of money.
Here’s how to do it: First, pay your bills quickly.
“Tip number one is pay your bills on time, every time. This is really going to be critical in maintaining a great credit score, because even a 30 day late payment could reduce an otherwise very strong score by 100 points, ”said Ted Rossman, Senior Industry Analyst at CreditCards.com
Then use only a portion of your available credit. This is called your credit utilization rate, which is the amount you owe divided by your total credit limit.
“If you are someone who has a bunch of cards and a bunch of max cards, then the banks are going to be nervous about lending you more money because they saw that you might not pay back. not be these cards as quickly, “said Schulz.
This means using less than 10 percent of your total credit limit.
Stop opening credit cards.
“You will likely get the highest credit scores if you haven’t applied for new credit in the past year,” said Nathan Grant, senior credit analyst at CreditCardInsider.com.
Instead, the trick to increasing your credit limit is to make this call:
“Request a higher credit limit from your card issuer,” Schulz said. “If you can’t change the number of the balance part of the equation for your usage rate, you can at least change the number of the available credit part of that equation. “
Plus, fill your report with positive no-credit card payments using Experian Boost, for free.
“It’s going to attract non-traditional things like your rent to your streaming services, your cell phone payments, your utilities,” Rossman said. “You can really strengthen your report by putting these things in there. “
You don’t even have to go all the way to 800 to have good credit.
“Once you hit 760,780, you’re already going to be approved for most loans,” Schulz said. “You’re going to get the best deal for a lot of things already. It’s important to understand that you won’t make it to 800 tomorrow if you’re new to credit or if you’ve made mistakes. Good credit and good credit is a marathon. It’s not a sprint.
A long account history will also help you increase your score.
“It’s a little easier said than done,” Rossman said. “You can’t magically age, although a tip is that you can get yourself added as an authorized user to someone else’s credit card. For example, a young person could boost their credit history by using a parent’s credit card.
Make sure the authorized user has good credit.
“The goal is to help you improve your credit score even further,” Grant said. “You just want to make sure that this account is now used more responsibly, doubly with another user. “
You can also try to lower your interest rate.
“One of the best ways to do this is to get a zero interest rate balance transfer credit card that allows you to go one year, 15 months, 18 months without paying interest on the transferred balance. “said Schulz.
You can also try calling your credit card issuer and asking for a lower interest rate.
“It sounds crazy and you probably don’t realize how good your chances of getting this discount are,” Schulz said. “Data from LendingTree showed that about 80% of people asking for a lower interest rate got one and the average reduction was around 10%. This is really important and can save you a lot of money. It is definitely worth taking the time to pick up the phone and make that call because interest is so deadly when you are in debt with a credit card.
The key to increasing your credit score is to take certain steps to improve it.
“I’ve been there,” Schulz said. “I had $ 10,000 in credit card debt in my twenties and it consumed my life for several years. The most important thing you can do is start taking action. Even something small. The last thing you want to do is do nothing because that’s when things snowball.
Reaching 800 may take years, but you will see your credit score start to increase within six months of taking these measurements.
If you have a question an eyewitness wants to know, email us at EWTK@kens5.com or call us at 210-377-8647.