To improve your credit score over 710, you must understand what your credit score is based on.
We covered this topic in another post to learn more about it click here. Your scores are based on 6 criteria and understanding how to optimize them will boost up your score.
Below is a list of those criteria, each one plays a role in what type of score you currently have.
- Revolving utilization
- Length Of Credit
- Missed Payments
- Total Accounts
- Hard Inquiries
- Derogatory marks
Remember being in class on the first day of school. Lots of high expectations here.
You’re probably thinking “Oh yeah this class will be an easy A” until you get the syllabus.
Then you realize that it’s really going to be an up heal battle all semester. That “A” is a perfect credit score, it seems possible to achieve at first but not too many have it.
The goal is to maintain a steady process that you can improve on throughout your life or in this example all semester.
Tip 1: Pay off your card before the statement
Waiting until the end of your statement to pay off your card is a bad move. As it affects your revolving utilization. This especially true for people who tend to use their credit cards a lot more.
= Credit Used / Total Credit
An example I used previously would be if I had a credit limit of $6,500.00 on my account and I used $238.00 of this limit my percent utilization would be 4%.
So, by keeping the percent utilization low it positively impacts my credit score.
That’s why it’s always a good idea to keep your credit used balance low. The only way to do that is to pay ahead of time.
I suggest aggressive card users pay off your balance every one to two weeks. Everyone else a week before your statement ends instead of the day prior just to play it safe.
This method allows you to avoid those big bills from racking up month over month dropping your credit score.
Tip 2: Manage Your Credit History
This is an important tip to consider as with any “A” you get in school your scores are all cumulative to your overall grade.
Over time as you get new credit cards, obtain a mortgage for a home, or buy a new car it all factors into the overall score.
That’s why I say it’s a process to build on. When you pay on time lenders trust that you’re a responsible person they can lend money to.
As a direct effect, your score steadily goes up. This where the length of your credit plays a role.
That’s why it’s often frowned upon to close down credit cards prematurely. The longer your credit history the better.
Lengthy credit history is something that influences your Fico Score.
I classify this as a tip because not too many people know how it can positively affect their scores if it’s managed correctly.
To manage all your credit cards, you must have these questions answered at all times.
- How many cards do I have?
- What is the current balance?
- Are they paid in full?
- When did I last use them?
- When is the right time to close it down?
Tip 3: Avoid Missing Payments On Your Credit Cards
Out of all the 5 tips – how to improve a credit score over 710 this tip is most important. DON’T MISS YOUR PAYMENTS.
Every tip feeds into the overall score but missing payments can dramatically drop that score.
You can follow everything mentioned in this post and still end up with a bad score if payments our missed.
These drops are hard to recover from as well. A history of on-time payments is tracked across all the cards you own.
There is a calculation that depicts where you might be currently.
On-time payments / Total Payments
If your calculations are just one percent off from 100% this can hurt your score. These numbers are also influenced by the number of cards you have as well.
It may be easier to recover your dropped score if you have one or two missed on-time payments across multiple cards.
This is because you’d have a higher number of both on-time payments to the total.
That being said, I think your #1 goal is to never miss a payment.
That means setting alerts on the phone, keeping tabs on all your cards, and automating payments.
Tip 4: Don’t Default On Credit Cards
Lots of people make the mistake of buying things that just can’t afford. If you can’t afford the item with what you have in the bank than it’s not worth it.
You must be disciplined which is hard in today’s flash buy me now culture.
What ends up happening is people start to max out or rack up credit card debt. Due to a tough or unforeseen financial predicament there forced to default on a credit card.
This ends up hurting their scores forever. Defaulting on your card is the best way to destroy your credit score.
So, if that’s the goal you’re close to achieving it. You’re better off paying the minimum balance every month until it’s all paid for.
If you do default on your card it goes to collections and becomes a derogatory mark.
Tip 5: Get More Credit Cards
I know this last tip sounds crazy, but it can get your score over 710. It’s a good sign if you can show to lenders that you’re responsible with 6+ credit cards.
This means you’re paying all your cards on time, no defaults, and there’s low utilization. It shows lenders that you been there done that 6+ times.
It’s a correlation to good money management skills and this can extend to all other facets of your financial skills.
You can handle a car payment or a mortgage. It’s not as big of a risk to lend you more money.
I don’t recommend you go out and get more credit cards. But it’s a factor and it can positively contribute to boosting your credit score.
Now if you’re the type that isn’t good with money or can’t handle more than one credit card, don’t do this.
These 5 tips – how to improve a credit score over 710 is good way to get that score over the hump.
Putting each tip into practice and being consistent is ultimately key to succeeding in improving your credit score.