• Your Cheat Sheet for a Higher Credit Score

     

    Have you looked at your credit score lately? If so, good for you! If not, why not check out where you stand? Having a high credit score with the three credit reporting agencies (Experian, Equifax and TransUnion) means you won’t need to turn to direct payday lenders. It’s the key to getting a mortgage, online personal loan or even a credit card for emergency expenses. To see your current credit score, you must first get a copy of your credit report. Any qualified US resident can get theirs from one of the three credit reporting agencies. Also if you apply for a bank loan or direct personal loan you may get a copy from your lender if you’re denied because of bad credit. Once you’ve obtained your credit reports you can review your personal lending history to see where you rate on the list of credit worthiness.

    Credit scores, also commonly called FICO scores, can range anywhere from 350-850. As you might have guessed, credit scores near 350 are not desirable. In fact, most people who apply for direct lender loans are going to have a score in this range. how to avoid a direct loan and increase your credit score On the opposite side, scores nearer to the 850 range are viewed favorably by traditional lenders like banks and credit unions. The closer you are to 850, the more likely you are to receive online loans from actual direct lenders. Consider this to be especially true even in today’s shaky economic climate.

    If your credit score needs some serious improvement in order for you to receive a direct bank loan, don’t fret. There are several surefire ways to improve your credit score and even avoid an installment loan. By following these methods you won’t have to shell out major bucks to an online company that wants to “fix” your FICO score for you. Instead, you should ask yourself these seven lending questions. Answer these questions correctly and it bodes well to avoid a payday loan direct lender. You’ll be on your way to raising your credit into one that qualifies you for the credit you need. Also consider avoiding companies that charge to fix your credit history. You can often do this on your own and there are numerous credit report scams listed on the Federal Trade Commission site about these issues.

    1. Do you you make your monthly payments on time?

    This may seem like a simple question. However, do you pay your bills and online loan payments on time? Answer honestly and think about your entire financial portfolio. If you don’t pay your bills on time on a regular basis, you are doing yourself a major disservice. why you don't need bad credit direct loans Consider what will happen to your wallet and your credit score. Not paying your bills on time can lead to hefty late fees (sometimes as much as $40 for a single late payment.) It’s also going to increase interest rates that can be already high with payday loan companies and installment loans.

    In addition, you may not realize that forgetting to pay your credit card bill one month will have lasting effects on your credit score. FICO scores are weighed heavily on different factors, including your payday loan payment history. Even one 30 day late payment can result in a dramatic drop in your credit score. If you continually forget to pay your bills on time, it’ll have a lasting effect on your credit score. It will take months and maybe even years to raise your credit score. Lesson here? Pay on time, every time.

    2. Can you avoid taking out payday loans?

    Cash flow is another term for income. If you don’t have a consistent income, then your ability to pay your bills is severely limited. Late bills equal lower credit score. Also, low income increases your debt-to-income ratio, which also lowers your credit score (more on that later.)

    3. Have you ever declared bankruptcy?

    If you’ve declared bankruptcy in the last seven years, then the chances of having a low credit score are high. Bankruptcy shows lenders that you have taken on more debt that you are able to repay, making you a bad candidate for a loan. In fact it can even be difficult to get approved for direct lender payday loans with a past BK.

    4. How close are you to your maximum credit card and cash advance limits?

    Sure, you may be able to pay your minimum cash advance payment each month. However, consistently keeping your credit card balances close to their limits has a negative impact on your credit score. This reflects in your credit score, lowering it significantly and making it more difficult to be approved for a personal loan.

    5. Are your current and recent accounts active?

    It makes sense that in order to have high credit scores, you must be using credit. To help keep your credit score high, make sure you have open and revolving credit accounts that you are paying on time to help raise your credit score. This does not include short term borrowing like payday loans and cash advances. These forms of borrowing are often not reported to the bureaus. Also factor in the amount of student loan debt you have. While this is treated different by lenders and the bureaus, it helps to understand the full financial picture. Contact the US Department of Education for more information on possible student loan debt forgiveness.

    6. How many active direct lender loans or credit cards do you have?

    Yes, it’s true that you should keep credit accounts open and active. However, have too many credit cards open can have a negative impact on your credit and lead to the use of direct payday loans to make monthly payments. A good rule of thumb for a high credit score is to have no more than two to three credit cards open at any given time. Any more than that will show that you are willing to take on a large amount of debt, which isn’t good for the FICO score.

    7. What is your debt-to-income ratio?

    As we discussed earlier, it’s important to have income coming in to help you pay your debts. However, if you have too much debt or too little income, then your debt-to-income ratio increases and lowers your credit score. Facts about direct payday lenders and your credit history Same goes with the amount of direct payday lenders you’re working with. The more active loans you have outstanding the more you’re going to see an increase in interest rates. Debt-to-income ratio describes the amount of debt you have in relation to the amount of income you have coming in each month. A good rule of thumb for a high credit score is to keep your debt to income ratio at no higher than 35%.

    While putting in the effort to increase your credit score can take some time, it’s worth it. You can avoid actual payday loan companies and work with whoever you’d like. Just think about how nice it’ll be when you are able to buy your dream home or purchase a new car. All thanks to your high credit score and your ability to work hard to achieve it.