How to improve your 672 Credit Score
A significant number of U.S. lenders consider consumers with a Good FICO(r) Score to be “acceptable” borrowers, meaning that they believe that you are qualified for a wide variety of loan products, even though they might not charge the lowest interest rate available to you or give you the most choice in the products offered. About 9% of consumers with Good FICO(r) Scores are at risk of becoming severely indebted.
A FICO(r) Score of 672 provides access to a wide range of loans and credit card products, but increasing your score may improve the likelihood that you will get approved for even greater numbers at more reasonable lending terms. Also, since a FICO(r) Score of 672 is at the lower end of the best range, you will likely want to carefully manage your score to avoid falling into the more restrictive Fair Credit Score Range (580 to 669).
Understand the benefits of a good credit score
The best way to figure out how to raise your credit score is to look at your FICO(r) Score. Along with your score, you will get insight into ways to increase it, depending on specific pieces of information from your credit file. You will find some good general tips for improving your score here.
A good score likely reflects relatively little credit history marked by sound credit management. It could also describe a more extended credit history with some mistakes along the way, such as occasional late payments or skipped payments or a propensity for relatively high credit utilization rates.
Maintaining your Good credit score
To maintain your progress and avoid losing ground, avoid behaviours that could reduce your credit score. Delinquent accounts and late or skipped payments hurt your credit score.
Payment history.
A history of paying bills on time will help your credit score. It is pretty simple and the one most significant impact your credit score has, accounting for up to 35% of your FICO(r) score.
Credit usage rate
To figure out your Credit Utilization Ratio, add the balances on your revolving credit accounts, like credit cards, and divide the results by your total credit limit.
Credit utilization accounts for approximately 30% of your FICO(r) score. Credit scores typically benefit from long credit histories. There is not much that a new credit user can do to help with this other than to avoid bad habits and try and build up a record of making prompt payments and reasonable credit decisions.
Length of credit history.
The length of your credit history may make up as much as 15% of your FICO(r) score. Credit scores reflect your total outstanding debt and the types of credit you have used. FICO(r) scores tend to prefer different types of credit, including both instalment loans (i.e., loans with fixed payments and set repayment schedules, like mortgages and auto loans) and revolving credit (i.e., accounts like credit cards, which allow you to borrow up to a specific credit limit and pay it off using varying payments). Your credit mix could affect as much as 10% of the FICO(r) Score.
Total debt and credit.
Recent credit activity may make UP to 10% of your FICO(r) score. Your FICO(r) Score is strong, and your chances of qualifying for a broad range of loans are reasonable. But if you can raise your Credit Score and ultimately get into the Very Good (740-799) or Excellent (800-850) credit range, you can become eligible for better rates, which could save you thousands in interest payments over the life of the loan.
To help you automate this process, you might want to consider a credit monitoring service. You also might consider an identity-theft-protection service, which can flag suspicious activity on your credit reports.
Avoid a high Credit Utilization Rate: High Credit Utilization, or the use of debt. Try to keep utilization on all of your accounts under 30% to prevent hurting your score. Consumers with good credit scores averaged 4.9 credit card accounts.
Look for a good balance in your credit mix. No one should borrow money they do not need, but smart borrowing–in the form of revolving credits and instalment loans–can help build good credit scores. Pay bills on time. You have heard this one before, but there is no best way to improve your credit score, so find a system that works for you and stick to it.
Automated tools like smartphone reminders and mechanical bill-paying services work for many, and post-it notes and paper calendars work for others. After six months, you might find you can recall without assistance.
