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The Frustrating 600 Credit Score - Integrity Credit Solutions

hey folks this is Eric with integrity

credit Solutions and I'm going to go

over the frustrating 600 credit score if

your credit score is right around 600 it

can be aggravating because your score is

really not all that bad but it's not

really good either it's not good enough

to qualify for most mortgages without a

lot of cash down and it's not good

enough to get you a really good interest

rate on a car truck or SUV but it's not

horrible either okay but here are a few

things that you can do to increase your

credit score quickly first I want to go

over the breakdown of how your score is

calculated so it will make better sense

to you

35 percent of your credit score is your

past credit history how well you've paid

your bills so on in the past the next

biggest area is 30% and that's your debt

ratios now your debt ratios are

determined by your your limits of your

credit limit versus how much you owe so

if you have a two hundred dollar credit

card and you owed $100 that means you

have a 50% debt ratio because you owe

half well we'll get more into that in

just a few minutes okay now with debt

ratios the 30% is not across the board

what I mean by that is there's two

different types of accounts that you

need to be that you need to know about

one is an installment account an

installment account is like a an auto

loan or a personal loan it has a

predetermined number of installment

payments the next type of account is

called a revolving account the revolving

account does not have a predetermined

number of payments the it can go forever

the best example of that of an evolving

account is a credit card okay

the debt ratio on a on a personal loan

or on auto loan it is calculated into

your credit score but it's not that

significant and the reason is because

those accounts are designed to be maxed

out from the time that you first opened

them up when you drive your new car off

the lot if you borrow $20,000 that's

your that's your balance so it's maxed

out it wouldn't make sense to crush your

credit score because you bought a car

but on a credit card it's entirely

different because if you get a two

hundred dollar five thousand dollar

credit card whatever the number is in

the mail generally there's no balance on

it and FICO scores the debt ratio on

there is thirty percent of your credit

score so it's very important that you

keep that less than twenty percent at

all times well I don't want to get too

far in advance too far ahead but the

next area is 15 percent that's the

average age of your accounts so the

longer your accounts are open the higher

your credit score is going to be most of

the time people that have 750 credit

scores and up they've had a mortgage for

several years

those are accounts that are generally

open from fifteen to thirty years oh and

they also have credit cards that have

been open for for long periods of time

okay the next biggest area the next area

is your mix of credit and that means the

type of credit like a mortgage or an

installment loan or revolving account

and then last area is inquiries this is

an Aquarius every time you have your

credit pulled you just want to keep

these to a minimum especially until you

get your credit scores up where you know

pretty much you're going to be approved

for the loan that you're applying for if

you have bad credit you don't want to go

around having everybody pull your credit

because it's going to continue to drop

your score alright back to here if you

don't have any credit cards open and

you're in the high five hundreds right

around six hundred

opening up a credit card is going to

drastically increase your credit score

because especially if you keep it below

this twenty percent so let's go back to

the two hundred dollar credit card

example if you've got a two hundred

dollar credit card the twenty percent is

forty it's forty bucks twenty percent of

two hundred if you do that

cause your credit score to skyrocket

because you're activating this part of

your credit score but you know what else

is doing as you make payments you're

also you're going to impact this portion

of your credit score your credit history

it impacts your debt ratio okay now if

you did not have an account open its

also going to help you out here with

your mix of credit so that's 65 75

percent of the factors that impact your

credit score that one credit card is is

affecting so if you don't have a credit

card open one so I know you're probably

wondering Eric you've got bad credit

how am I going to open one well there

are a few options out there the the best

option in the beginning can be a secured

card a secured card is where you send in

a deposit most of them start around 200

250 bucks to a credit card company and

that's the amount of your credit line so

but even though you send that back that

deposit in you still want to maintain

that 20% or less and it's going to score

exactly like a standard card would on

your credit score but let's say that you

do have credit cards open you've got

$2,000 with the credit cards and they're

maxed out many times when people are

stuck around 600 and they do have credit

cards open think it's because these are

maxed out okay having a maxed out is

almost as bad as not having them at all

as far as your credit score is concerned

so if that's the case you need to create

a plan to get these paid down as quickly

as possible okay and then there are

there are other ways to do this as you

start to see your scores increase once

you're over about 616 620 you start

paying these down your credit score

starts to go up call your credit card

companies and ask them for a limit

increase if you've never had late

payments with these companies many times

they will increase your loan

so let's say you have four cards at 500

bucks okay and all of these are maxed

out and you start to pay them down you

get them paid down to 1,400 each and

your credit score starts to go up well

all of a sudden here you're at about 80%

debt ratio that will cause your score to

go up but let's say they increase two of

these increase them to two 750 dollars

so all of a sudden you've got 750

fifteen twenty-five hundred dollars you

have 16 you just dropped your debt ratio

down to about 60% that's going to cause

your credit scores to go up even more so

it's not necessarily just the dollar

amount it's the percentage it's the

amount

it's the percentage that you owe in

relation to your limits so there you

have it folks that's a that's going to

help you get that credit score up the

difference between a 600 and a 650 isn't

that much and it doesn't take long to

get your source to jump 50 points not

long at all so open up your credit cards

get your debt ratios paid down it could

be the difference between whether or not

you can buy home or not whether or not

you qualify for 15% on a car loan or 8%

that's huge it's life-changing

it's the beginning of you owning your

dream home and climb climbing out of

debt because you're not paying as much

an interest every month every month so

you don't have to deal with that 600

credit score any longer than you want to

take action if you have any questions

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thanks a lot and have a great day