for ways to improve credit scores?
a high credit score can mean the difference
of thousands of dollars of saved interest expense
compared to others with a lower score. For example,
if you improve credit score results from the credit
bureaus, even a few points can make huge difference
in the interest rate you will pay for a home purchase.
most commonly used credit scores available to lenders
are FICO scores, which is a scoring method created
by Fair, Isaac & Co...FICO!
FICO scores are provided to lenders by the three major
credit bureaus: Equifax, Experian and TransUnion.
we get into some tips how to improve credit scores,
it pays to review the major areas that determine
your FICO score.
history on credit and retail store cards, loans
that you owe. They look at how many accounts have
balances and the proportion of that balance to the
long is your credit history? The longer the better.
credit accounts. Applying for a bunch of credit
cards all at once can hurt your score.
credit types, such as mortgages, retail loans,
credit cards and installment loans.
that boost your credit score take time, months or years,
and others areas to improve credit score can be made
with a phone call! That said, here are tips to raise
your credit score!
tips to improve credit scores
your bills on time. Your payment history is a
major factor (35% of your FICO score) in determining
your credit score. If you pay your bills late, or
had an account referred to collections, your credit
score will take a major hit.
your credit limit. Another large factor is the
amount of your debt in relation to your credit limit.
If you have a card with a $10,000 credit limit and
your balance is $9,000, this will not help to improve
your score. To make the debt/credit limit ratio look
better, you can try to call your credit card company
and request an increase in your credit limit. (Don't
use the extra credit though! That defeats the whole
purpose and puts you further in debt)
apply for many cards at once. This will not improve
your credit score because this is a characteristic
of high credit risk groups.
for loans within a two week period. Every time
you request a loan and the lender pulls your credit
report, it can hurt your score. It is part of the
FICO formula that reasons "this person is trying
to apply for credit way beyond their means!".
If you keep the loan process within a two week period,
all of the credit report lookups are bundled in as
one single request!
for errors on your credit report. Examine your
credit report for errors and contact the credit reporting
agencies to fix any errors on your credit report.
down your debt to lower your debt to credit ratio
I mentioned above. This has a twofold benefit of improving
your credit score and reducing your debt.
out what your is on your credit report is one of the
most important things you can do, because even the smallest
mistake can cost you big money. When you get a loan,
one small error can mean thousands of dollars
in cost to you! There are 3 major credit reporting agencies.
It is important to check with each company each year
to make sure that an error isn't costing you big time!
I save myself the time and expense of ordering from
each of the 3 bureaus and get your reports all at
once for less at Credit Reporting.
report from all 3 bureaus - Order a 3-bureau
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