Credit scores pay an important role in our lives. Unless we have good credit scores, it will be difficult for us to qualify for any kind of loans. Many consumers are still not sure as to what things lead to increase or decrease in credit scores. It is very important to note that the credit utilization ratio (i.e. the amount of revolving credit in a month compared to the amount of available credit a person has) is one of the important factors in calculating credit score.
Here are list of 5 unusual ways which may help you in increasing your credit scores:
1. Multiple payments throughout the month: You should remember that lower the balance, the better it is for your credit report. In order to lower the balance, you can make periodic payments throughout the month. Some credit card companies could limit the number of times you can pay in a month. You can call your credit card company and negotiate with them so that they are ready to accept multiple payments.
2. Pay off the debts before the due date: It will be better if you could pay off your debts before the last statement date. You will be able to know your statement date by giving a call to your lender. Normally, the balance on your last statement date gets reported to the credit bureaus. So, if you pay off your bills before the due date, you'll be able to reduce your credit utilization ratio. This will help you in increasing your credit score to a large extent.
3. Save your credit in case of short sale: A short sale will damage your credit score and lower it by 75-100 points. Apart from that, the lender may also report it to the credit bureaus that the loan was settled for less. This might damage your credit further. In order to avoid this, you can negotiate with your lender so that he does not report the balance owed to the credit bureaus. You can negotiate with the lender before or during the short sale process regarding this issue.
4. Contact your creditor for good-will deletion: If you've always paid your debts on time but missed your payments for 1-2 times, you can remove those negative marks from your credit report by going for the option of good-will deletion. You need to write a goodwill letter to your creditor regarding the same. However, if you're habitually late, then the lender/creditor won't consider your request.
5. Go for the option of pay for delete: You can ask your collection agency to remove the debt from your credit report by sending them a pay for delete letter. Once you pay off the debt, a large number of collection agencies will be happy to stop reporting the account to the credit bureaus. However, in order to be on the safer side, you should get this in writing. You should ask the collection agency to send you a letter written on their company letterhead that mentions the clause that they will remove the debt from your credit report once you pay it off.