The Secret to Increasing Your Credit Score
So that you are able to increase your credit score It is necessary to follow some tips that are offered, including by credit protection agencies such as Serasa.
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However, we must first clarify the following:
These are effective tips, but they must be followed with dedication and calm so that positive results can be seen in the future.
Summary with the appetizer of this content:
- The secret to increasing your credit score: first, understand what it is and how the procedure works;
- What is a credit score?
- How does scoring work?
- So, what can you do to improve your credit score?
The secret to increasing your credit score: first understand what it is and how the procedure works
Your credit score is one of the most important metrics that indicate the health of your financial life.
Therefore, the score indicates to creditors on a scale of 0 to 1000, how responsible you are with your finances, we will understand more below:
What is a credit score?
The score can be defined as the result of your payment habits, in addition to your relationship with the credit market.
Therefore, it is a value that can be conferred by some companies (in this content we clarify which companies can consult your CPF) and for you.
But before talking about how increase your credit score, what does it mean to have a high Credit Score?
In general, the higher your score, the greater your chances of honoring your financial commitments over the next 12 months.
And thanks to all this trust and payment security, you have easy access to financial market alternatives.
Therefore, banks and financial institutions are free to use the score as additional information for decision-making when granting financing, for example.
In other words, during the credit analysis, not only your personal information will be analyzed, but also your financial history through the score.
It is worth noting that the most common is the Serasa Score, a statistical model available on the market for analyzing credit risk.
Despite this, there are other companies that act as credit protection agencies and determine your score, like the SPC.
How does scoring work?
Before defining how you can increase your credit score, we should mention the following:
The Serasa score is defined based on a study of the historical behavior of groups of unidentified people.
These people have similar financial characteristics, and the results of a given client are compared with others in the same group, and this is where the score is generated.
And what would be the financial characteristics?
Well, paying bills on time, having a history of bad debts, and also having a good relationship with creditors.
However, this is a Serasa method; other companies can use other types of strategies.
Regarding the score, it varies from 0 to 1000, and there is a division between the following groups:
- High risk of default – between 0 and 300;
- Medium risk – from 300 to 700;
- Low risk – above 700 points.
How is my score information obtained?
Through technological advancements and integration with registered company databases, a large database of information on individuals has been developed.
Note that most of the score information involves your CPF, a major identifier.
This identifier is recorded in several transactions, allowing the recording of your consumption activities.
Thus, companies that provide services such as energy providers, TV operators, credit card companies and stores have integrated their information with credit protection agencies.
In other words, your entire history is formed, as well as the score.
In the case of a legal entity, the same occurs, with the main focus on reputation being the company's CNPJ.
So, what can you do to improve your credit score?
By following the strategies below, you will notice a gradual increase in your score:
1 – Clear your name, the first step to increasing your credit score
In our article “What's the minimum credit score for a credit card? Find out everything!”, we explain how you can check your CPF, as well as your debts.
Therefore, we recommend that you check exactly how much you owe.
And why is clearing your name the first step to increasing your score?
Most banks refuse to provide any financial services (with the exception of those that offer credit to those with bad credit, where interest rates are higher).
Furthermore, schools and colleges may refuse to renew the enrollment of students in default, and banks may also prevent the opening of checking accounts or block overdrafts.
Those with bad credit may also be denied credit when facing a credit check, whether to hire a specific service online or rent a property.
Therefore, note the following:
Companies, not just those focused on the credit market, check the names of candidates with agencies such as Serasa and SPC to avoid the risk of default.
Therefore, a fundamental step towards increase your credit score is to clear the name which can be done as follows:
Initially, we recommend that you take advantage of Serasa's actions, such as paying a certain amount to pay off all your debts through the Feirão Limpa Nome program.
On the other hand, you can use the Negotiate Debt portal, another example of a platform to help you get out of debt.
In addition to exclusive discounts, you can also count on good installment options, it's worth a visit!
And speaking of negotiation, know that you can make counteroffers, defining what actually fits your budget.
Finally, you can contact the creditor directly and inform them of your interest in paying off the debts.
2 – Have an account in your name
A little further up we informed you that one of the criteria taken into consideration to define your score is your relationship with creditors.
Typically, for those who have a good relationship with a particular institution, their score tends to rise, as the company informs credit protection agencies that the customer is a good payer.
So, in addition to having a checking account, apply for a credit card and some financial products like a loan at the same bank.
But, of course, you must fulfill your commitments by paying everything on time!
Also note that it's important to apply to the same bank, as each bank has its own credit score, meaning your points will always be positive.
This strategy also makes the analysis for any service request faster, as your profile is already known to the bank.
3 – To increase your credit score, update your registration data
Another tip for obtaining credit and other services more easily is to keep your information up to date.
This is because the more accurate the information, such as email, telephone number and address, the more reliable your registration will be for the credit market.
Therefore, the update can be done via the internet or by post, understand:
For the first option, visit the Serasa website and log in using your password and CPF.
Then, click on the “solutions” section in the top corner of the screen.
In “my data”, select the “registration update form” option, as well as choose the information that will be updated.
Attach the documents indicated according to each request and follow the “update status” section.
Done, the team will check the documentation and if it is correct, the update will be made, with a deadline of 5 business days.
Alternatively, to update your data via the Post Office, download and print the Registration Update Form.
To download, visit this content from Serasa and click on “Cadastral Update Form.pdf”, which is at the end of the page.
It is essential that you read the disclaimer below the form fields.
After filling in all the information that needs to be updated, remember to sign and acknowledge the signature at the end of the document.
Finally, you must send the term along with supporting documentation by mail to Serasa, at the address below:
Doctor Heitor José Reali Avenue, 360 Miguel Abdelnur Industrial District Zip Code 13571-385 – São Carlos-SP.
4 – Set up your bills for direct debit
To increase your credit score, you must keep all payments up to date.
Again, this is a way to show companies how you honor your financial commitments.
Therefore, it's a good idea to set up automatic debit for everything, avoiding the risk of forgetting a bill and having your credit rating negatively impacted by an oversight.
Here, we can list gas, telephone, or electricity bills, as many as you can.
5 – Activate the Positive Registry
Can the Positive Registry help with your Score?
Many people have this question, and we can say yes!
Now, through changes to the score calculation, the Positive Registry has an even greater weight in your score.
Through this registration, you can build a history of on-time payments, which makes it easier when you need to seek credit.
In fact, according to the company's financial policy, you can count on lower rates when compared to someone who does not have an active Positive Registry.
Therefore, keep in mind that the more positive information about you, the greater the chances of your score increasing.
6 – To increase your credit score, do not commit more than 20% of your H3 income
For example, if you receive R$$1000 per month, it is not recommended to commit more than R$20% (R$$200) to paying debts.
When you commit 30% or 40% of your salary to pay off debt, without considering your cost of living, this creates more debt.
7 – Activate Serasa’s turbo score
On the other hand, keep in mind that the turbo score would be the most effective way to increase your score, according to Serasa.
Therefore, turbo is a solution that aims to accelerate the scoring of people who had debts and recently paid them off through Serasa Limpa Nome.
The step-by-step process is very simple, just visit the website and log in.
If you have never accessed it, register by providing some of your personal information.
You will then be able to check if there is any type of agreement available for your profile.
If so, generate this agreement and make payment to increase your credit score.
Therefore, we must clarify the following question:
Does each debt receive turbo points differently?
Yes, it's completely common for you to pay off a debt and receive 20 or 30 points for it, and several factors can influence this score.
For example, your score range influences.
According to the company, lower score bands will receive a higher number of points when paying off a certain debt.
For more information, visit the company website.
Conclusion
To conclude our content, please note that your score will not increase immediately after paying off your debt.
In fact, paying off your debt causes your score to increase, but you must wait for the increase to occur gradually.
Please note that there is no magic formula for getting more points, so if someone offers you an instant increase, be aware that this is a scam!
Be very careful, clear your name, pay your debts and be patient.
