A good credit score is typically anything that is 700 and up. If your score is not 700 or above then there is room for improvement. In the credit world there are three types of people: those with good credit, those with bad credit, and those with no credit.
If your credit score is good but you want it to be great then there are some things that you can do. The most important thing that you can do is to keep doing what you are doing to have that good score that you have now. There are generally two main issues that stop people with a good credit score from having a great credit score. The first is that they usually do not have enough different types of credit accounts. For instance if you paid for your car in full and you do not touch credit cards then chances are that the only open account you probably have is a mortgage loan. Even though that is a large account and you probably pay on time every time the problem is that the Credit Agencies want to see some diversity in the type of open credit accounts that you have.
If you want to continue building credit you will have to prove that you can handle multiple accounts at one time. The second major issue is almost the exact opposite of the first. You may be hurting your score by utilizing too much of your available credit. Even if you are paying all of the bills on time every month it hurts your credit score when you use too much of your credit. The banks like to offer the credit, but they penalize your credit score when you use too much of it. In order to keep building your credit score your should only use between 10% to 20% of your available credit. If your ratio is above that range it could be hurting your score. If neither of these strategies improves your credit score then I don't know what to tell you. Maybe it's a conspiracy.
For those people with a bad credit score there is a simple solution to this problem that will have you on your way to re-building your credit in no time and I am surprised that you have never heard of it before. PAY YOUR BILLS!!!!!! If you can't afford it do not buy it. If you don't need it do without it. The important thing to know is that it is not too late for anybody. If you change your habits then you can turn your credit around. As I said before the more recent the account the more of an impact it has on your credit score. So you just have to work on establishing good credit accounts. If your credit score is bad to the point that you cannot get any credit then you will need to follow the strategies in the next paragraph to get yourself in a position where lenders will deal with you again.
For those people with no credit believe it or not you are basically in the same position as those with a bad credit score. You are stuck in the vicious no credit cycle where you nobody will give you any credit because you have no credit history and you have no credit history because no one will give you any credit. This sounds like an impossible situation but it's manageable if you have an idea of what to do. The first thing you can do is you can apply for one of those department store credit cards. You know the WalMart card, the Target card, the Sears card, etc. It is much easier to get approved for one of those cards than it is to get approved for a credit card. This is a good place to start because even though they are not the real deal never leave home without it cards, they still represent credit and the account activity does get reported to the Credit reporting agencies. Another thing you can do is you can get a secured credit card. In order to get a secured card you have to first deposit money with the institution that you are dealing with and they will issue you a credit card with a limit that is equal to the amount that you deposited.
The card that is issued to you is the same as a regular credit card, the only difference is that you had to deposit that money as collateral. The good thing about the secured credit card is that the account activity is reported to the credit reporting agencies which allows you to start building credit, and you can get a contract with the company that you get your card from stipulating that the secured credit card will be converted into a regular credit card. Most contracts like this are for a year. Another way to start building credit is to have your name put on the account of someone who already has credit accounts open. Just make sure that the person whose account you are going to join is reliable. You don't want to get your name on the account for the purpose of improving your credit score to find out later that the person does not pay their bills which will only make your credit score worse. These are the most effective ways of building up your credit score from nothing to something.
NaQuan L. Gray is a finance major at the Pennsylvania University School of Business. His goal is to educate
people on money management and to show people that financial literacy is the key to improving the quality of their lives. To read more of this author's articles go to his website at [http://www.astonagendas.com]
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