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Credit Score News, Tips & Advice « Credit Scores > Credit Score Advice > Raising your credit score doesn’t happen over night

Raising your credit score doesn’t happen over night

By George Hauser
Published: Thursday, September 10th, 2009

Whether you are applying for a credit card account, planning to get a home mortgage or a car, or seeking insurance, you should know that lenders and providers would most probably check your credit score. A huge part of their approval will depend on this three digit number based that’s based on your credit report.

Just by looking at your credit report, they will determine how likely you’ll be able to pay for the money they are loaning you. The higher your score, the least problems you will have because that means the least risk you reflect.

Of course, everybody wants their credit scores sky-rocketing. But that doesn’t happen over night and because it’s only a representation of your credit report, it means that effort must go to the keeping it clean. The five things in a credit report are Payment history, Amounts you owe, Length of credit history, Types of credits used, and your new credit. Improve your credit score through the following actions.

  • On payment history
    Remember to pay your bills and pay them on time. One credit score advice regarding credit history is to contact your creditor when you foresee problems paying on time. Try to create an agreement and do negotiate with them in terms of paying so that at least some of your late notations won’t get included on your credit report. Another credit score advice is to consult a legitimate and non profit credit counselor when you have serious problems about paying. Be cautious of scammers who tell you they could fix your problems in no time.Also, keep your credit balances and your debt-to-credit limit ratios low. Even if you are not using an account, you should keep it open. This is because having an account on zero balance lifts up your credit score. Another credit score advice is to avoid opening accounts just so you can alter the debt-to-credit limit ratios. Pay off your debts as much as you can, that should be the priority.
  • Length of your credit history
    Remember that your credit score can rise if you keep your accounts open for the longest time. But of course, it’s much better if these accounts are well managed. A simple credit score advice to follow is to not open accounts very quickly. Let your present account live for at least three years. The rationale behind keeping your accounts is that opening one account after another tells your creditors that you are having problems paying your debts. And the fastest way to escape them is to create a new and clean account.
  • New credit
    Credit inquiries must be kept to the minimum if you plan to improve your credit score. Remember that if you make too many credit inquiries, your creditors would think that you have plans opening new accounts. This boils down to the idea that you are an irresponsible payer, as previously mentioned. The credit scoring softwarares will recognize your credit inquiries. One credit score advice that can help you reduce credit score reduction is to do credit inquiry, for example on home loans, within a short period of time. Pull your credit inquiries together.However, there is no harm in checking your own credit report; that doesn’t count as a credit inquiry. If you have had problems in payment in the past, opening new accounts is advised. But be sure to pay them on time this time and avoid maxing them out.
  • Type of credit used
    Mixed type of credit is only advantageous for your credit score if you know how to manage them well. If you are not very confident in always paying on time, choose installment loans since payments remain the same until balances are paid.

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