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Tips to improve credit score?

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  • Tips to improve credit score?

    I am finishing my training in a few months and am about 2-3 years away from buying a home. My current credit score is around 650. Aside from the basics of paying down my student loans and saving money for a 20% downpayment, what are other ways to maximize my credit score in the next 3 years prior to making the big purchase? Any tips or tricks are appreciated!

  • #2
    Learn how its calculated and the weightings to each portion. Obviously aim for low hanging fruit in heavy weighted segments that are simultaneously addressable. Chart attached. After that its just a game. Open a few credit cards, pay down others, etc...boom 800 score in no time.


    • #3
      You mention saving money for the loan as a way to maximize your credit score.  That won't do anything for it, though it will help you avoid PMI.

      The companies want to see that you can be trusted with money and responsible with borrowed money.  A credit card or two can actually help with that.  You get a card with say, a 10k spending limit.  You pay that all the time, boom, payment history goes up.  Since you now have more credit, but since you are spending the same amount every month, your credit utilization goes down.  So that helps with your amounts owed.  As you hold the card longer and your student loans get older, your accounts history improves.  In the short term, it dings you a tidbit since you are taking out new credit, but that goes away pretty quickly.


      • #4
        You need to make more timely payments on more accounts.  You want high credit limits and low utilization.  It takes some time, but not long.

        As said above, applying for new accounts hurts your score temporarily but you need the account history to raise your score.