Is it really possible?
Absolutely! All it takes is a little dedication and careful planning, and you can completely turn your financial life and status around.
Why spend all of your time focusing on one aspect (credit score or debt), when you can target them both and double your results in half the time?
The Spin Down Method
Unlike the more common "roll down" technique, the spin down method is much easier to manage and more realistic for the average consumer.
- Determine your percentage of obligation (POO) for each card / account. It sounds fancy (and a little humorous in a childish way!), But it's very easy: Simply divide how much you owe by your total credit line. For example, if you owe $ 800 on your primary card and your total credit line is $ 1000, then your percentage of obligation is 80 percent.
- Decide on a monthly payment amount. Set aside the same amount each month (as much as you can afford) to put towards eliminating debt. It does not matter if it's $ 100 or $ 1000, as long as it's consistent and, preferably, automatic.
- Get the POO for each account to 50%. While exact details of how your credit score is determined are unknown, it is accepted that a POO of 50 percent or above will negatively affect your score. So, starting with your highest POO account, make your monthly payments until it's at 50 percent, then move to your next highest POO account.
- Now, go for 30%. Once you have all of your accounts down to 50 percent of obligation, commit your monthly payments to getting them all to 30 percent, starting with the largest.
- The home stretch. Now that your debt is significantly reduced, you can begin using the more common roll down technique of paying off each remaining card, starting with the one with the highest interest rate.
By using this method, not only will you increase your credit score in greater and more frequent increments, but you will also reach your goals sooner than if you simply stuck with the traditional roll down method the entire way.
That's why the spin down method is the best how to increase credit score technique.