Improve Your Credit Score

Raising your credit score is a bit like shedding pounds: It's timely and there is no quick fix. In fact the majority of quick fix efforts often backfire. Below are some tips that everyone should follow to maintain and sculpt your credit to peak performance.

Establishing Credit

  • Do not over apply
    Every time you apply for credit the lenders pull your report which causes inquires to many inquires can be damaging to your credit score.
  • It's OK to request and check your own credit report.
    If you check your own credit it  will not affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers. Everyone is entitled to one free credit report a year you can access your free credit report now.
  • Establish your credit history
    Opening new accounts responsibly and paying them off on time will raise your credit score and shows lenders good faith. Keep in mind your interest rates will be slightly higher but once you have paid in good faith for apprx 6 months you should be able to refinance at a lower rate.

Good Payment History

  • Pay your bills on time.
    Late payments and collections can have a major negative impact on your credit score. Lenders are hesitant to lend to you when they know you failed to pay back other lenders.
  • If you have missed payments, get current and stay current.
    The longer you pay your bills on time, the better your credit score.
  •   Paying off a collection account will not remove it from your credit report.
    A negative item can stay on your report for seven year seven after being paid and in some cases paying it reactivates the seven year time period.

Amounts Owed

  • Keep balances low on credit cards and other “revolving credit”.
    High outstanding debt can affect a credit score negatively . You should keep your balance at half or less for example if you have a $1000.00 credit limit you should keep it at $500.00 or lower.
  • Pay off debt rather than moving it around.
    The most effective way to improve your credit score in the amounts owed area is by paying down your revolving credit. Always try to make payments larger than the minimum monthly payment.
  • Don't close unused credit cards as a short-term strategy to raise your score.
    You may throw red flags or drop your score by closing to many accounts you want to have open revolving accounts in good standings just now your limits.
  • Don't open a number of new credit cards just to increase your available credit.
    This approach could backfire and actually lower your credit score. Its good to balance you need revolving credit but don't overdue it.

Length of Credit History

  • Keep your oldest accounts open.
    Its good to have an account that has been active for awhile.

Types of Credit Use

  • Apply for and open new credit accounts only as needed.
    Don't open accounts just to have a better credit mix - it probably won't raise your credit score.
  • Have credit cards - but manage them responsibly.
    In general, having credit cards and installment loans (and paying timely payments) will raise your credit score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
  • Note that closing an account doesn't make it go away.
    A closed account will still show up on your credit report, and may be considered by the score. If you choose to close an account make sure it is paid up to date.