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5 Ways To Raise Credit Score
It's not as hard as you think to raise credit score. It's a
well known fact that lenders will give people with higher credit
scores lower interest rates on mortgages, car loans and credit
cards. If your credit score falls under 620 just getting loans
and credit cards with reasonable terms is difficult.
There are more than 30 million people in the United States
that have credit scores under 620 and if you're probably
wondering what you can do to raise credit score for you.
Here are five simple tips that you can use to raise credit
score.
1. Get a copy of your credit report
Obtaining a copy of your credit report is a good idea because
if there is something on your report that is incorrect, you will
raise credit score once it is removed. Make sure you contact the
bureau immediately to remove any incorrect information.
Your credit report should come from the three major bureaus:
Experian, Trans Union and Equifax. It's important to know that
each service will give you a different credit score.
2. Pay Your Bills On Time
Your payment history makes up 35% of your total credit score.
Your recent payment history will carry much more weight than what
happened five years ago.
Missing just one months payment on anything can knock 50 to
100 points off of your credit score.
Paying your bills on time is a single best way to start
rebuilding your credit rating and raise credit score for you.
3. Pay Down Your Debt
Your credit card issuer reports your outstanding balance once
a month to the credit bureaus. It doesn't matter whether you pay
off that balance a few days later or whether you carry it from
month to month.
Most people don't realize that credit bureaus don't
distinguish between those who carry a balance on their cards and
those who don't. So by charging less you can raise credit score
even if you pay off your credit cards every month.
Lenders also like to see a lot of of room between the amount
of debt on your credit cards and your total credit limits. So the
more debt you pay off, the wider that gap and the better your
credit score.
4. Don't Close Old Accounts
In the past people were told to close old accounts they
weren't using. But with today's current scoring methods that
could actually hurt your credit score.
Closing old or paid off credit accounts lowers the total
credit available to you and makes any balances you have appear
larger in credit score calculations. Closing your oldest accounts
can actually shorten the length of your credit history and to a
lender it makes you less credit worthy.
If you are trying to minimize identity theft and it's worth
the peace of mind for you to close your old or paid off accounts,
the good news is it will only lower you score a minimal amount.
But just by keeping those old accounts open you can raise credit
score for you.
5. Stay Out Of Bankruptcy
Bankruptcy is the single worst thing that will destroy your
credit score. Bankruptcy will lower your credit score by 200
points or more and is very difficult to come back from.
Once your credit score falls below 620, any loan you get will
be far more expensive. A bankruptcy on your credit record is
reported for up to 10 years.
The reality of a bankruptcy is it will limit you to
high-interest lenders that will squeeze out high interest rate
payments from you for years.
It is better to get credit counseling to help you with your
bills and avoid bankruptcy at all costs. By getting credit
counseling instead of declaring bankruptcy you can raise credit
score over a much shorter period of time.
Copyright © 2005 Credit Repair Facts.com All Rights
Reserved.
Gary Gresham is a mortgage loan officer and the webmaster for
http://www.credit-repair-facts.com
He offers you credit information, debt elimination programs and
informative facts that give you the knowledge to correct your own
credit and credit report. For more credit related articles go to:
http://www.credit-repair-facts.com/articles_1.html
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