How to Increase your Credit Worthiness

When I came in to USA in October of 2002, I had no credit record on files of 3 major credit bureaus namely: Transunion, Experian and Equifax. Every time I would apply for a credit card I would receive a letter in mail saying that I had no credit record on files. It was really frustrating. Then I talked to a banker at one of the local banks who suggested that I apply for a secured loan. I got a $1000 loan against a CD of $1000 and paid this loan off in 9 months. It looked stupid but it worked. After 9 months I reapplied for a credit card and was approved for $3000. Today I have an unbelievable credit. So, how was I able to get such huge credit worthiness in such a short period of time? Well, besides paying your bills on time etc., etc., here are some unique tips:

Instructions

Difficulty: Easy

1. First step is to know some basics. Credit worthiness of any individual is rated on a scale of 300 to 850. All three credit bureaus use a statistical model referred to as ‘Isaac Model’, developed by Fair Isaac, to rate the credit of a person. However, how it calculates the credit score is a mystery. Based on my own extensive experience with it I have come up with some ways of increasing the credit score that I would like to share with you.
2. Borrow more and more money from your creditors. Take advantage of 0%APRs with no balance transfer fee. However make sure not to spend this money. Leave this money in your savings account and pay at least minimum due and never make late payments. Remember you are borrowing this money not for spending but for improving your credit score. The moment your creditor reports this credit balance to the credit bureaus your credit score dips. But don’t worry keep on paying your monthly dues and when your promotional period is about to end pay off your balance in full. if you had a score of 600 at the time of borrowing money it fell to 550 after you borrowed but when you paid off amount in full the credit score jumped not to 600 but 650 only if you had no late payments. Try it, it works. The more you borrow and pay back higher your scores would be. However paying off balances quickly will not help your credit score. Let’s say you borrowed $5000 today under a promotion and paid it off in 1 week this will not increase your score. You must at least keep balances for few months to see substantial results.
3. Apply for multiple credit cards within one calendar day. We all know that any inquiry to your account that is as a result of your credit card application lowers your credit score. Interestingly, one application would create the same effect as 10 applications if they hit your credit bureau within 1 calendar day. In other words 10 inquiries in 1 day is only taken as 1 inquiry.
4. Purchase every single thing on your credit card. The more you use your card and then pay your bills on time more score you will accomplish.
5. Increase you line of credit. When you get approved for a card you get the lowest credit line. Most of credit card companies have set your credit accounts in such manner that after every 6 months you automatically get hidden increments to your credit line but only if your account remains in good standing. However, you won’t be able to see such increase unless you apply for it. So when you do this you will see instant approval in your credit line increase. Means that your credit file will not be pulled from the credit bureaus. Get your credit lines increased as much as possible. Remember your credit score depends on the percentage of the credit line that your have spend. lets say you have a balance of $5000 on a card with a line of $6000 your score will be low compared to the same balance on a card with a line of $10000.
6. Apply for multiple credit cards from same bank. This is also one of the ways of increasing your line of credit as well. If you have a card with a bank and you applied for increase in line of credit and it got rejected, apply for another card with the same bank once you get approved consolidate your credit lines. However, some times the banks steal the new card's credit line from your existing card’s line. Good idea is to get approved through a merchant. For instance BP visa and amazon.com visa are issued by chase bank. Merchant rout increases your chances of getting multiple cards from one bank.