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Having good credit is an important part of having financial health these days. With the changing of the economy it is good to know where your credit is. If it is good or bad. And if it is bad what can you do to improve it.

The first and most important step in this entire process is obtaining a copy of your credit report.

Why is this important? Because according to Huffington Post Money, nearly half of Americans do not know there credit score.

And unfortunately 43 million people have a credit score less than 599. - Plus, you can't improve what you do not know.

Once you obtain your credit score look it over for any errors. 7 out of 10 credit reports have errors on them. If you see any errors or suspicious charges, dispute them right away.

The second step is understand what creates this all powerful 3 digit number. Today your credit score is like a vital sign, it is being monitored at all times. It can impact insurance premiums and interest rates.

You can be denied the ability to rent, purchase a home or car, credit card, and even employment with bad credit.

-35% of your credit score is based upon your payment history. Paying your bills on time.

-30% is based upon your debt to credit ratio. How much debt vs. how much available credit you have. You want this number to be 30% or less.

-15% is based on how long you have had credit for. The longer the better. So do not cancel old credit cards you are not using anymore.

-10% is based on new credit. New loans and recent inquires.

-10% is types of credit. i.e. revolving and installment.

Instant Credit Boosters

1. Call and ask for a credit line increase. This one is simple. Most banks and credit card companies are eager to increase your spending limit in hopes you will spend more. This is great because, if you have a credit limit of $1,000 and a balance of $500 and you get a credit increase of $2,000 then you just dropped your credit card utilization rate from 50% to 25% which will increase your credit score.

2. Take out a small loan and pay off your credit cards. i.e. If you owe $5,000 in credit card debt and take a loan out from your local bank or credit union, I always prefer the credit union because they tend to have lower interest rates, and pay off your loan, then your utilization rate went down to zero. And even though you have the same amount of debt, loans are weighed differently, and this will put a nice boost to your credit score.

Under The Radar Ways To Boost Your Credit Score

One of the best and unknown strategies for boosting your credit score is becoming an "Authorized User." If you have a family member or close friend who has a credit card with at least a 2 year credit history, high limit and a low balance, with good payment history, ask to become an authorized user of the card. This will give you all of the same credit benefits and instantly boost your credit score. A lot of parents will utilize this strategy for their children when they are just starting to build their credit.

What Are The Newest Strategies?

(There are 2 programs rolling out his summer that will increase your credit score)

1. UltraFICO FICO is rolling out Ultra FICO. A program that will link to your checking account, savings account, and money market account. How it works is taking a snapshot of your accounts and seeing that you have enough money to pay your bills and loans. FICO said 7 out of 10 people who sign up for this free program will see an increase in their credit score. All you have to do is go to the FICO website and opt in and fill out the quick info. That's it. And you can opt out at any time.

2. Experian Boost. Experian has a free program rolling out this summer that will help those with thin credit files or those with lower credit scores. The program will include your utility payment history to your credit file. Everyone pays their utilities on time, and just by pay to them on time you can see an increase in your credit score. Due to the results Experian experienced in the trial test, they said that 14% of people could see an increase in their credit score from 580 to 620. Which is the difference of getting approved and declined for a loan or credit card.

Just like with the Ultra FICO, it links to your checking account. Experian monitors if your utility bills, electric, gas, water, and phone, are paid on time. And also like Ultra FICO all you have to do is go to the website and opt in, and you can opt out at any time.

You are Stronger Than Failure,

Danny Cole

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