If you think paying your bills on time, wiping out your balances, and not closing too many accounts at once is the ticket to excellent credit, you're sadly mistaken.
Yes, having a good credit utilization ratio -- total credit used vs. total credit available in a month -- factors into your credit score.
But while these basics keep you in the clear with your creditors, they aren't earning you many brownie points with the credit score gods, according to Bankrate.com.
For instance, paying your credit cards on time often times isn't enough, considering that credit scores tend to be calculated from the balance on the statement date, instead of the due date.
This means that you could pay off your whole balance, but your credit report will say otherwise, chipping away at your score.
If you want to defend your credit score from such unexpected lashings, here are bankrate.com's 5 uncommon ways to raise your credit score.
- Pay your bills before the statement
Balances of previous statement dates are what are usually reported to credit bureaus. If you pay most of your bill before the statement date, you can lower your utilization rate, giving you a higher credit score. However, not all lenders use the balance on your statement date. Safest bet? Call your lender and ask when the balance is reported.
- Make multiple payments
Making more than one payment every payment period lowers the amount of credit you're using. However, some credit cards actually put a cap on how many times you can pay per month! Safest bet? Call creditors and see how they handle multiple payments.
- Request a good-will deletion
A good will deletion is basically asking your creditor to cut you some slack, and remove one or two bad marks on your credit, expunging the error! However, this only works if you've had minimal late payments and a mostly spotless payment history. You can ask a customer service rep, but be prepared to go up the ladder if need be, it can make the difference in your credit score. According to Bankrate.com, if you qualify, often times they will approve, and you'll be surprise how quickly your score shoots up!
- Pay to remove collection debt
If you have a debt that's gone into collection, collectors may agree to remove the debt if you agree to just pay it off. However, make sure you get it in writing before you agree to pay anything. The process is sometimes referred to as "pay for deletion".
- Protect yourself in a short sale
After a short sale, mortgage lenders tend to report that the home loan was settled for less than the full amount. That means even if the obligation was finalized and no additional money is owed, your credit could still take a brutal beating. To help lessen the damage, you can arrange with your lender not to report a balance owed.
Safest bet? Request this before or during the short sale process, because lenders lose interest in speaking with you after payment is complete.
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