Olathe Real Estate Agent Explains How To Use Credits Cards To Improve Credit Score

Many people don’t realize how important their credit score is and how much of an impact it can have on their mortgage payment. Sometimes just a difference of 1 point can make a difference of around $50 on one’s mortgage payment. There are several techniques that one can use in order to improve their credit score. The easiest one is to manipulate credit card debt.

The credit bureaus will look at your ratios on your credit cards. If you have a $1000 limit, and you have a balance of $750…that is considered high risk and thus your credit score will be impacted in a negative fashion. You can help your score by taking one of 3 actions:

1. Paying the credit card balance card down

2. Raising the limit to the credit card balance

3. Transferring it to another card with a higher limit.

Paying it down is self-explanatory. To raise the credit card balance, all you need to do is call your credit card company and ask for them to increase your limit…most of the time they will do this. If you pay your bill online, sometimes there is even an option to request a balance increase online. Therefore, if they raised your credit card balance to $1500, you would now only have a 50% debt ratio compared to a 75% ratio and thus your credit score would increase.

Finally you can transfer money to a different credit card which has a higher balance so that your average balance across all of your credit cards is lower. As you can see, the last two ways are ways you can improve your credit score without paying anything. Remember to read the fine print on transferring money to different credit cards.