If you want to know how to get a better FICO credit score then pay off your debts. The amount of debt you have and your payment history make up 65% of your FICO score – almost 2/3rds of your score. When you make all your payments on time you are viewed as a responsible borrower and lenders will offer you favorable credit terms.
They also want to see that you are not overextended and borrowing too much money.
The key to increasing your Experian, Equifax and Transunion credit scores is by paying down what you owe on a timely basis. Do not be late on your payments as this can easily crush your credit score. All your hard work will go down the drain with one 30 day late payment.
You can create a personal budget you can stick with and work on slashing your expenses as much as possible and also work on getting more work to increase your take home pay so you can have more cash to allocate to your debts. Or you can find a second job or do some freelance or consulting work.
You can bust your butt for a couple years and get your debts paid off and probably have a pretty decent FICO credit score of 720, 740 or even higher – assuming you are also taking care of the other 3 credit score factors.
It won’t be easy. It will take hard work. But once you pay off your debts you will have a nice credit score that you will be proud to show off.
Start with a personal budget, have a good hard look at your expenses and see where you can cut out unnecessary spending. Look for extra part time work and devote all available free cash to your debts to get them paid off.
Since your credit score affects so much of your life you would think that your job has an effect on your credit score right? Let us take a look at how your employment affects your credit score.
Does my job affect my credit score?
The short answer is no. Where you work does not have an impact on your scores. What can actually happen is your credit score can influence where you can and cannot work. Or whether you can advance at your current employer or not.
Employers regularly check consumer credit scores now to see how responsible their employees are. If they see your score dropping over time, they may not consider putting you into a position with more responsibility as you have not been able to demonstrate that you are responsible with your own finances.
Potential employers also use credit scores to screen out job candidates they would not wish to hire.
This is unfortunate because there may be extraordinary circumstances around why your credit score is so poor even when you are fully qualified for the position you are seeking.
If you are aware you have a really poor credit score you could possibly address this in your cover letter and explain the situation.
So to answer the question about your job affecting your credit score the answer is no. Potential employers cannot access your salary information either from your credit file as this information is not contained in your report. You cannot also be denied for a loan just based on where you work either. You can be denied based on how much money you make though.
You are busy. Sometimes you forget to make your payments on time and you get hit with a late fee. You may even have to pay a higher interest rate due to your late payment. If you want to boost your credit score an easy way to do so is start paying all your bills on time.
Since over 1/3rd of your credit score comes from your payment history it is critical that you make all your monthly payments on time.
You can setup an automatic bill payment through your bank or with each creditor. This way you can ensure that all your creditors will be paid on time and will report your good payment history to the three major credit bureaus – Experian, Transunion and Equifax.
Late payments ruin your credit score and they can cause your creditors to view you as a higher risk customer and they may increase your credit card APR from a manageable one to a much higher 20% or even 30% APR which you cannot afford to keep up with.
Before you forget and life calls setup an automatic payment or a payment reminder so that you can start paying all your bills on time and start slowing increasing your credit score.
It only takes a few late payments to lower your credit score by 50 to 100 points or more but it takes many months of on time payments to build your FICO score back up.
Start now and you can see positive results in the months to come.