Improve your credit score
If you are looking to buy a house, it's important to work on improving your credit score before you buy. The better your credit score, the lower the interest rate you will be able to get, and the more house you will be able to afford. You should start working on improving your score about 6 months before you plan to make your purchase.
Here are some tips for improving your credit score:
1) Get a copy of your credit report from http://www.annualcreditreport.com. This site allows you to get a copy of your credit report from all three of the major credit bureaus (Experian, Equifax, and TransUnion) once a year for free.
2) Once you have your credit report, review it for things that are wrong. If you find things that are wrong, file disputes to fix them.
3) Pay your bills on time. This is key. Late payments reflect badly on your credit score.
4) If possible, pay off your credit card bills every month, do not carry a balance. Doing this will result in a much better credit score. If you need to carry a balance, make sure the balance is less than 35% of your credit limit for that particular credit card. If the balance gets above this level, your credit score will suffer dramatically.
5) Don't apply for any new credit. While it may be tempting to apply for a store brand credit card to get 10% off a purchase you are making, every time that you apply for a credit card it triggers an inquiry into your credit history. Each inquiry into your credit history actually lowers your credit rating! Personally, I find this to be an absolutely ridiculous factor to include in the ratings, but it's there so you need to deal with it.
6) Do not close old credit card accounts. You may think that you are helping yourself by doing this, but it actually has the opposite effect. One of the biggest factors in your credit score is the length of time for which you've had credit. Closing old credit cards reduces the average age of your accounts, and older is better.
7) Conversely, if you have recently opened new credit card accounts and you don't really need them, close them. This will actually help the average age of your accounts and will also reduce your debt liability.
Here are some tips for improving your credit score:
1) Get a copy of your credit report from http://www.annualcreditreport.com. This site allows you to get a copy of your credit report from all three of the major credit bureaus (Experian, Equifax, and TransUnion) once a year for free.
2) Once you have your credit report, review it for things that are wrong. If you find things that are wrong, file disputes to fix them.
3) Pay your bills on time. This is key. Late payments reflect badly on your credit score.
4) If possible, pay off your credit card bills every month, do not carry a balance. Doing this will result in a much better credit score. If you need to carry a balance, make sure the balance is less than 35% of your credit limit for that particular credit card. If the balance gets above this level, your credit score will suffer dramatically.
5) Don't apply for any new credit. While it may be tempting to apply for a store brand credit card to get 10% off a purchase you are making, every time that you apply for a credit card it triggers an inquiry into your credit history. Each inquiry into your credit history actually lowers your credit rating! Personally, I find this to be an absolutely ridiculous factor to include in the ratings, but it's there so you need to deal with it.
6) Do not close old credit card accounts. You may think that you are helping yourself by doing this, but it actually has the opposite effect. One of the biggest factors in your credit score is the length of time for which you've had credit. Closing old credit cards reduces the average age of your accounts, and older is better.
7) Conversely, if you have recently opened new credit card accounts and you don't really need them, close them. This will actually help the average age of your accounts and will also reduce your debt liability.
| Rating: | 100% positive, 4 total Votes |
| Categories: | finances credit cards credit score free |
| Added: | on May 28, 2007 at 1:12 pm |
| Added By: | bursar |
