{"id":7436,"date":"2023-12-13T05:46:05","date_gmt":"2023-12-13T05:46:05","guid":{"rendered":"https:\/\/www.irstaxapp.com\/?p=7436"},"modified":"2023-12-13T05:46:16","modified_gmt":"2023-12-13T05:46:16","slug":"how-to-boost-credit-scores","status":"publish","type":"post","link":"https:\/\/www.irstaxapp.com\/how-to-boost-credit-scores\/","title":{"rendered":"How to Better Your Credit Scores in 2024?"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><picture><source srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-1024x585.webp 1024w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-300x171.webp 300w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-768x439.webp 768w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-150x86.webp 150w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-750x429.webp 750w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore.webp 1050w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" type=\"image\/webp\"><img src=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-1024x585.png\" height=\"585\" width=\"1024\" srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-1024x585.png 1024w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-300x171.png 300w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-768x439.png 768w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-150x86.png 150w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore-750x429.png 750w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/CreditScore.png 1050w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" class=\"wp-image-7437 sp-no-webp\" alt=\"credit scores\" decoding=\"async\" loading=\"lazy\"  > <\/picture><\/figure>\n\n\n\n<p>Your <em>credit scores<\/em> is your financial passport, without which you can not get any credit financing, <a href=\"https:\/\/www.irstaxapp.com\/calculator-for-claiming-student-loan-interest-on-taxes\/\">loan<\/a>, or <a href=\"https:\/\/www.irstaxapp.com\/mixed-use-property\/\">mortgage<\/a>. This is a fact of life, without any doubt or debate. Your credit score signifies your financial health to lenders. So, we must understand this economic term and devise a way to maintain a good credit score.\u00a0<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_62 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-663556d762bcc\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-663556d762bcc\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.irstaxapp.com\/how-to-boost-credit-scores\/#What_is_a_Credit_Scores\" title=\"What is a Credit Scores?\">What is a Credit Scores?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.irstaxapp.com\/how-to-boost-credit-scores\/#How_do_they_compute_credit_scores\" title=\"How do they compute credit scores?\">How do they compute credit scores?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.irstaxapp.com\/how-to-boost-credit-scores\/#Two_Credit_Scores_Compute_Models\" title=\"Two Credit Scores Compute Models&nbsp;\">Two Credit Scores Compute Models&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.irstaxapp.com\/how-to-boost-credit-scores\/#5_Good_Reasons_for_a_High_Credit_Score\" title=\"5 Good Reasons for a High Credit Score!\">5 Good Reasons for a High Credit Score!<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.irstaxapp.com\/how-to-boost-credit-scores\/#What_are_Benchmark_Credit_Scores_Ranges\" title=\"What are Benchmark Credit Scores Ranges?\">What are Benchmark Credit Scores Ranges?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.irstaxapp.com\/how-to-boost-credit-scores\/#7_Sure_Shot_Ways_to_Improve_Credit_Scores\" title=\"7 Sure Shot Ways to Improve Credit Scores?\">7 Sure Shot Ways to Improve Credit Scores?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_Credit_Scores\"><\/span>What is a Credit Scores?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A credit score is a numerical expression based on a level analysis of a person&#8217;s credit files, representing the creditworthiness of an individual. The most common credit score model in the U.S. is the FICO score, which ranges from 300 to 850. Three private, for-profit companies in the United States collect and maintain individuals&#8217; credit information and compute credit scores. These three major credit bureaus are :<\/p>\n\n\n\n<ol>\n<li>Equifax,&nbsp;<\/li>\n\n\n\n<li>Experian, and&nbsp;<\/li>\n\n\n\n<li>TransUnion.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_do_they_compute_credit_scores\"><\/span>How do they compute credit scores?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>These credit bureau companies regularly collect information about your financial transactions from lenders like banks, credit card companies, and mortgage companies. This data includes the amount of credit you have, your payment history, the length of your credit history, types of credit used, and any new credit you availed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Two_Credit_Scores_Compute_Models\"><\/span>Two Credit Scores Compute Models&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are two models to calculate a credit score- FICO and VantageScore. FICO, developed by the Fair Isaac Corporation, is the most common method to calculate a person&#8217;s credit score.&nbsp;<\/p>\n\n\n\n<p>The&nbsp;<strong>VantageScore<\/strong>&nbsp;model is a collaborative effort by the three credit bureaus: Equifax, Experian and TransUnion.VantageScore 4.0 is the latest version of the credit scoring model. Its&nbsp;<a target=\"_blank\" href=\"https:\/\/www.vantagescore.com\/lenders\/why-vantagescore\/our-models\/\" rel=\"noreferrer noopener\">website&nbsp;<\/a>claims to compute the credit scores of 33 million U.S. adults.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Good_Reasons_for_a_High_Credit_Score\"><\/span>5 Good Reasons for a High Credit Score!<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Having a good credit score is essential for several reasons, as it significantly impacts your financial opportunities and the cost of borrowing.&nbsp;<\/p>\n\n\n\n<ol>\n<li>The most apparent benefit is quick approval of credit cards and loan applications, as lenders will feel a lower risk of lending money to you. They may sweeten the deal with lower interest rates and more favorable terms on loans and credit lines, such as higher borrowing limits.<\/li>\n\n\n\n<li>These days, Landlords often check credit scores as part of the tenant screening process. A good credit score can make renting a house or apartment easier.<\/li>\n\n\n\n<li>Utility companies may waive security deposits if your credit score is high, as it indicates a lower risk of late or missed payments.<\/li>\n\n\n\n<li>Some employers check credit scores during hiring, especially for positions involving financial responsibility or security clearances.<\/li>\n\n\n\n<li>In many states, insurers use credit-based insurance scores to determine auto and homeowners insurance premiums. A better score can lead to lower premiums.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_Benchmark_Credit_Scores_Ranges\"><\/span>What are Benchmark Credit Scores Ranges?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There is no universal benchmark credit score for lending, as requirements can vary significantly between lenders and types of financial products. However, credit scores are generally categorized as follows:<\/p>\n\n\n\n<ul>\n<li><strong>Excellent Credit<\/strong>: 800 and above<\/li>\n\n\n\n<li><strong>Very Good Credit<\/strong>: 740 to 799<\/li>\n\n\n\n<li><strong>Good Credit<\/strong>: 670 to 739<\/li>\n\n\n\n<li><strong>Fair Credit<\/strong>: 580 to 669<\/li>\n\n\n\n<li><strong>Poor Credit<\/strong>: Below 580<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><picture><source srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-1024x576.webp 1024w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-300x169.webp 300w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-768x432.webp 768w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-150x84.webp 150w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-750x422.webp 750w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-1140x641.webp 1140w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores.webp 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" type=\"image\/webp\"><img src=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-1024x576.png\" height=\"576\" width=\"1024\" srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-1024x576.png 1024w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-300x169.png 300w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-768x432.png 768w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-150x84.png 150w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-750x422.png 750w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores-1140x641.png 1140w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2023\/12\/Credit-scores.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" class=\"wp-image-7438 sp-no-webp\" alt=\"credit scores range\" decoding=\"async\" loading=\"lazy\"  > <\/picture><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_Sure_Shot_Ways_to_Improve_Credit_Scores\"><\/span>7 Sure Shot Ways to Improve Credit Scores?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Improving your credit score requires strategies and behaviour to build long-term, sound financial habits. Here are eight steps :<\/p>\n\n\n\n<ol>\n<li>You are entitled to a free report once a year from each of the three major credit bureaus\u2014Equifax, Experian, and TransUnion.Use it and inculcate a habit of regularly checking your credit score.<\/li>\n\n\n\n<li>Paying your bills on time is a no-brainer step to improve or stop your credit score from going down. Payment history is a significant factor in credit scoring. Therefore, always pay your bills on time and avoid late payments, especially those over 30 days late, which can significantly damage your credit scores.<\/li>\n\n\n\n<li>You keep credit utilization low, usually below 30% of your total. This low credit utilization hints to creditors about your less dependence on debts. High credit utilization can be a red flag to creditors and can lower your score.<\/li>\n\n\n\n<li>Use Buy Now Pay Later (BNPL) schemes which let customers pay in installments over time.\u00a0. The credit card <a href=\"https:\/\/www.irstaxapp.com\/irs-afr-interest-rate-2022\/\">interest rates<\/a> are very high. Therefore, interest-free BNPL instalments are usually much cheaper than paying off a credit card bill and also help consumers maintain\u00a0<em>lower credit card balances.<\/em><\/li>\n\n\n\n<li>Keep old accounts open so that you build a longer credit history.<\/li>\n\n\n\n<li>A mix of credit types (credit cards, mortgages, auto loans, etc.) can positively impact your score. However, don&#8217;t open new accounts for a better mix; it should happen organically.<\/li>\n\n\n\n<li>Too many hard credit inquiries in a short time can negatively impact your score. Be cautious when applying for new credit.<\/li>\n<\/ol>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Your credit scores is your financial passport, without which you can not get any credit financing, loan, or mortgage. This is a fact of life, without any doubt or debate. Your credit score signifies your financial health to lenders. So, we must understand this economic term and devise a way to maintain a good credit [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7438,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3861],"tags":[],"amp_enabled":false,"_links":{"self":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/7436"}],"collection":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/comments?post=7436"}],"version-history":[{"count":1,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/7436\/revisions"}],"predecessor-version":[{"id":7439,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/7436\/revisions\/7439"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media\/7438"}],"wp:attachment":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media?parent=7436"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/categories?post=7436"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/tags?post=7436"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}