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Tips on How to Increase Your Credit Score

By Karen Anderson
Published: Wednesday, April 14th, 2010

Credit report tips are very important because it will show you how to increase you credit report scores. Credit score is calculated by weighing information in your credit report. Take note that if you aren’t’ careful about your credit, you could end up paying for clearly a low credit score.

As your credit score decreases, you become more of a credit risk in the eyes of your potential lenders. This means they’ll add a higher interest rate to your loan, and your monthly payments will jump. On the other hand, a high score will lower that interest rate.

As credit report tip, not only bank and lenders are concerned about your credit score. Even landlords, merchants, employers and insurance companies are now joining on the credit score bandwagon. Your insurers will use credit score to help them predict how likely someone is to file claims.

Your credit score are numbers ranges from 300 to 800. The exact formula of calculating the score is developed by Fair Isaac. The three major credit bureaus each have their own version of the credit score, all of which are based on the original Fair Isaac scoring method.

Putting a little thought into improving your score could prove a good investment. You can boost your credit and your chances of securing important loans by improving your credit score.

Here are some credit report tips that can help you increase your credit score.

First is to keep old credit accounts. These can be useful even if you are not using it. Your creditors will determine your debt-to- credit limit and the average age of your accounts. Make sure that these old accounts are clean of debts and high rates.

The second tip is to review your credit report. In this way you can check any errors that you can find on your credit report. Studies proved that high percentage of credit reports contains errors. Much of quarter of wrong information of credit report could hurt individual’s score. If you get rid of this negative information in your credit report, your score can increase noticeably.

The third credit report tip is to reduce your balances on your credit cards to 75 percent or less of your available credit. If you can, decrease it more to 25 percent which is more preferable.

Pay your bill on time is the fourth tip that you can do to improve your credit score. Punctual payments of your bills are the most effective way to increase your score. In the breakdown of credit score, you’ll find that that payment history is the weightiest of all elements of your score

The fifth tip to do is not let anyone make an inquiry on your credit report unless it is needed. In general, the more inquiries, the lower your score. However, if you are shopping for a loan, make sure multiple inquiries occur within a few weeks, so that they can count as one inquiry on your score.

The last credit report tip is do not open new credit card accounts just to increase your available credit in the hopes of raising your score. Opening new accounts will at first have a harmful impact. In the long term, however, having more credit available can advance your score

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