Key Tips On How To Improve Your Credit Score Above 400

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improve your credit score above 400

Introduction To Credit Scores

You have heard mentions of the so-called “credit score” when dealing with financial institutions, lenders, or investment agencies for homes and cars. They discuss you things about their services and you are enticed. But the moment they discuss about this score, those with good ones move over to the next phase and happily get out of that building with packages that they got.

But what if you are on the lower end of the line?

Reasons Why Credit Scores Reach All-Time Low

The credit score is a three-digit valuation that comes from credit reports, and are used by lenders to determine your trustworthiness as a paying client.

There are five main areas that determine this score, namely:

  • Payment history at 35 percent
  • Amounts owed at 30 percent
  • Length of credit history at 15 percent
  • New credit at 10 percent
  • Types of credit used at 10 percent.

Knowing these can at least give us an idea on the current state of our finances. This means it’s just as important to understand what happens if we get low scores, and how to improve them. Here are some reasons why credit scores become extremely low:

  • Late Payments. As discussed earlier, payment history constitutes 35 percent of the credit score. This means that not paying and settling a bill on time, even just one, may greatly affect your rating and enable it to get down low. Experts say that credit reports with several late payments may have scores as low as 500 or even down to 400.
  • Too Much Collections. Companies transfer debts to collections when it has been unpaid for such a long time. This status seen on your reports will decrease the credit scores up to 45 notches or points, and even more. This article on removing collections will help you:
  • Closed Accounts With Open Balances. Before accounts are transferred over to Collections, financial companies usually close these accounts but remember that they still have open balances. It is alright when accounts are closed without open balances, since these will have minimal impacts or none at all. This instance is retained on the report for around seven years, and will still be part of the credit history even after settling them.

Tips On How To Improve Credit Score Above 400

A credit score of 400 is considered in the low end, and may impede processes when you try to secure a loan. Though bad credit scores will not directly affect this, which means that you can still obtain one with this score, the chances and the financial benefits of having a good score will outlast that of a bad score.

Here are some things you should never miss.

Guarantee The Good News In Your Credit Report. Believe it or not, you can guarantee that you receive good news when it comes to building credit. The key part here is that you take active action.

  • This means that amid credit reports that tell you about bad items, you have to make sure that it has at least a “good news” once every month. How is this possible? Take action. You may do this from as simple as using your credit and paying them, to getting yourself with a secured credit card.

Secure Yourself With A Line Of Credit. What’s the value of this? If you are anywhere in your life that you need loans for new houses or new cars, chances are, you will begin with a bad credit score since you have not really become financially “stable” yet.

  • A good beginning to work on this is to obtain lines of credit that can be taken from secured cards and store cards. The first is an account where you will be required to deposit a particular amount as your credit limit. It is different from the regular ones that really do not have a backup, not even a dime. In this way, you have safe money pre-invested which can be used to pay off these credit expenditures.
  • The latter is a card designed for store purchases. Many credit card companies partner with these stores to search for new market. This may have higher interest rates but can be a perfect training ground for those starting to build their credit.

Take Advantage Of Having A Variety Of Credit Lines. This is very simple as mixing up your lines of credit: such as house loans, car loans and credit cards. Having more lines that are responsibly handled can greatly impact your scores.

Have 100% Care When Opening New Credit Lines. People say that opening more credit lines negatively impacts your scores. This is true. But why were you recommended to open a variety of lines? This part should be taken with a grain of salt. Credit lines will affect your scores but can also be a reason for them to improve. Tread carefully through this venture.

Keep Utilization Levels Low. Utilization level is defined as the amount of credit limit used every month. Because it also determines your credit rating, be watchful of this aspect by never going above 30 percent of your credit limit. This doesn’t mean you shouldn’t use your credit anymore, but rather try to keep it low.


Getting yourself a credit score above 400 might seem like a challenge, but it’s not impossible especially if you use After all, getting yourself a score of something that high can bring a lot of benefits in the long run.

These points discussed above are things that should not be missed. But the most common actions such as paying bills on time and never maxing out your credit card are still part of your game plan.