5 Tips to Improve Your Credit Score
Boosting your credit score can save you money. Your credit score
is a number based on how well you pay back loans on time,
sometimes called a FICO score. The higher the score, the less
risky you are. The 3 players are Experian, Equifax and
TransUnion.
Your goal is to get above 620. That's the line for creditors. If
you are below 600, banks won't loan you money. In fact, if your
mom knew your credit score was that low, she wouldn't let you
borrow any money, either. If you can get the score above 700,
you get low rates. If you can eek out above 760, you can usually
get the lowest rates. Perfect score is 850. Average score is
723.
Under the Fair and Accurate Credit Transactions Act, you can
obtain one annual free copy of your credit report. For more
information visit www.annualcreditreport.com or call
877-322-8228. But you will still have to pay a fee to get your
actual score. Huh? They'll give you your credit history, but the
actual number, well, they can charge you $6 for.
Here's the deal. You can get one free credit report (no credit
score number) from each of the 3 reporting agencies listed
above. But, you can only do this once a year. So, I spaced my
requests out every 4 months instead of getting all 3 at once.
That way I can note changes. Just an idea.
Without further ado, here are the top 5 tips for improving your
credit score:
1. Pay your bills on time. If you pay
late, then your bill shows up in a special area called "Adverse
Accounts" and it lists what month you were late and how late you
were. Think its OK, it only happened 3 years ago. . .wrong. They
keep the list for 7 years. Yes, seven. Paying your bills on time
can raise your score as much as 20 points just in one month.
2. Keep you credit card balances low. Maxing out your
credit cards can lower your credit score by 70 points.
3. Don't open any credit cards you don't need. New accounts
lower your credit score by an average of 10 points.
4.
Have credit cards. Yes, you must have an installment type loan
and its OK. Just pay it on time. If you have no credit cards or
no installment loans, you tend to be a higher risk.
5.
Closed accounts don't go away. Believe me. I just checked my
credit report and some old stuff is still on there. Real old
stuff.
Hope this information helped you get your bills in order.