Q: What is the best way to earn credit score?

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I have been looking around to find out the best way to increase credit score.

I know most of us are using credit cards, rewards cards. But I am wondering if someone has great knowledge about how to increase credit score.

Better credit score, better chance of qualifying for better reward cards.

credit-scores

praveensapkota (rep: 36.8k) posted Apr 24, 2012

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16 Answers

i don't know what is the best way but there are many things that can affect your score: when you pay late, if you carry a balance on a credit card for a long period of time lets say your credit limit is 5000 and you carry a balance of 4500 and only pay the minimum or close to the minimum. when you open a new credit card account i heard that when someone pulls your credit sometimes it drops your score i guess the best way will be to do the opposite.

rd995 (rep: 23.9k) posted Apr 24, 2012

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Quite right.You should be more careful if you use credit card or other things related to money.

Sundy89 (rep: 2) posted Apr 25, 2012

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My Credit score has always been 750+ and I have owned one since I started college so about 8 yrs now. My only suggestion for you would be to use your credit card a LOT...for anything and everything BUT don't just make minimum payments, always payoff your debt on the card. I payoff my debt to 0 balance every month.
As the above 2 dper's said....just making minimum payments or even defaulting on those payments hurts your score by quite a bit. Also try to stay away from Store credit cards....lot of times they have a hidden fee attached to them and if you don't pay those fees on time it drops your score quite a bit.

Florida2Texas (rep: 9.91k) posted Apr 25, 2012

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If there is something in your credit score that is keeping it low, I understand that you can write an appeals letter to the agency. May not get it expunged, but may look better than just having an unexplained black eye on your score.

nthsll (rep: 12.3k) posted Apr 25, 2012

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I'm kind of obsessed with credit! So this is a fun topic for me :)
1. Don't be late on utility bills. They don't build your score but they can bring it down.
2. Every time you have a hard pull, i.e., apply for a credit card among other things, your score drops. However, a hard pull falls off in 2 years.
3. Keep track of your credit, you get a free look once a year from each credit bureau (annual credit report, you can google it). You can look at one of the three every four months or just all three at once to see how they compare. I use credit karma too, it's free and helps you see how your score is.
4. You can build your credit as long as you wait to pay when your statement comes in, it doesn't help if you pay it off before then. It does build your credit even if you pay no interest, but they say it is better to pay everything off except a tiny bit and then pay interest on that.
5. Aim to use less than 25% of your total available credit, lesss than 10% is better. Never max a card out! If there is an issue and your a couple days late, call your credit card company and find out what they can do, I've had luck with getting the payment put in and the late fee taken off and it did not show up on my credit, this was with store credit cards. If your bad at it, just pay the day your statement comes in!

Do you currently have credit & credit cards or loans?

dealwagger (rep: 9.19k) posted Apr 25, 2012

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I've got a related question: what about credit cards that are branched off someone else's account? Forgive me if there's certain terminology for this. My sister gave me a credit card that is also under her account when I had just turned 18. It has my name on it and I've used it occasionally. She pays it off immediately. (I, in turn, pay her back of course.) Does this also build my credit?

arsiel (rep: 12.9k) posted Apr 25, 2012

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Stop applying store credit card.

derwood (rep: 360) posted Apr 25, 2012

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@ Arsiel Yes, this does help build your credit, and that's a great way for young people to start establishing credit. As long as she continues those good practices like paying it off immediately, it will definitely help your credit. It works both ways, though--if she were to miss payments, or if you were to max the card out, etc. (not saying that either of you would, just using that as an example ;) ), then it will hurt her credit as well as yours. The same applies when there's a co-signer on a loan.

canis444 (rep: 263) posted Apr 25, 2012

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Some excellent advice here! Credit Cards are a great way to increase your score. Also, obviously, make sure you pay your bills on time or it could negatively affect your credit. I know I have said this before in the past but also make sure you bring your library books/videos back or they can actually sell your debt to creditors. It happened to me and I was kinda shocked. Now I'm sort of afraid of libraries...i'm a pretty forgetful person :P

VirginiaPeanuts (rep: 7.86k) posted Apr 25, 2012

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@arsiel & canis, that used to work, being an authorized user on an account. The new scoring model, Vantage Score, being used by all 3 bureaus no longer takes that into account. It would have to be an account that in which you are a joint user. This sucks for me because I added my husband on my accounts for the 5% off at Target and the VS Angel rewards points, etc., and it's not helping him build the credit his other marriage trashed. They discontinued that practice b/c ppl were paying to be added as authorized users and would "inherit" this amazing credit...until they caught on, crap! LOL

dealwagger (rep: 9.19k) posted Apr 25, 2012

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@dealwagger, I didn't realize about the joint account vs. authorized user thing, that's good to know. Thanks for the extra info!

canis444 (rep: 263) posted Apr 25, 2012

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Darn. I guess I don't really know if I'm a join user or not. I probably am though if that's the whole reason why she handed me a credit card. She knows more than I do being 12 years older an all x_x

arsiel (rep: 12.9k) posted Apr 25, 2012

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I posted a free kindle book yesterday about improving your credit score you might want to take a look at that it is still free if you don't have a kindle you can always read it on your computer or mobile device with their app

http://dealspl.us/freebies/p_your-credit-score-how-to-improve-the-3-digit-number-that

nimase85 (rep: 13.4k) posted Apr 25, 2012

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Credit Cards are a great way to increase your score?

lusily (rep: 1) posted Apr 26, 2012

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After doing a ton of reading about credit scores a few years ago, I wrote up a couple of articles with the bulk of what I think is important regarding credit scores. There are a ton of people giving out bad advice online (never use a credit card, only look for low-apr cards, etc), so make sure you're getting your advice from someone that actually knows what they're talking about. Here's the link to my credit score articles-

http://helpmewithfinance.blogspot.com/p/credit-part-1.html
http://helpmewithfinance.blogspot.com/p/credit-part-2.html

DanFinance (rep: 12) posted Apr 27, 2012

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@DanFinance: While paying off credit cards in full every month is financially smart, most of what I've read on the matter says that this practice has no effect whatsoever on one's credit score. In fact, the credit bureaus have no means of knowing whether you pay in full or carry a balance, since the banks report only your current balance and timeliness of payment to them.

Also, while using less of your available credit does lead to higher credit scores, having a zero balance from either non-use of a card or paying it down to zero BEFORE the statement closing date lowers your score, according to creditkarma.com.

fluffy (rep: 2.12k) posted Apr 27, 2012

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