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Are You Creditworthy? – Creditworthiness and Your Credit Score Tips

By George Hauser
Published: Tuesday, April 20th, 2010

Creditworthiness is a creditor’s measure of an individual’s or company’s ability to meet debt obligations. A lot of creditors check on a person’s ability to pay his liabilities thru checking on his credit score.

A credit score is a three digit number that ranges from 300 to 850. To other people it could just be an ordinary number but to lenders, creditors, mortgagors and most importantly to those who plan to secure a credit, this number means a lot.

Credit score tips maybe obtained anywhere on the web-others for free and some with a fee. Having a credit score that pegs off at 700 and above gives the inclination that the individual may be creditworthy. Most lenders have carved-in-stone rules about handing out the best terms, and those rules almost always place a major emphasis on your credit score. If their best rates are offered to borrowers with a score of 700 or higher and yours is a 698, those two points could cost you thousands of dollars. Those whose score are below 630 do not usually get a fairer chance of being granted a credit. If ever they do, their credit limits could be very low.

You can take steps to improve your credit score. The number of variables that play into an individual score make it impossible to say that one particular action will increase a given score by a certain number of points. But there are certain good guidelines; you need to observe some credit score tips.

According to the consumer affairs manager of Fair Isaac Corporation ,Mr. Craig Watts “The mantra for getting a great score is pay your bills on time, keep account balances low, and take out new credit only when you need it,” People who do that faithfully have very high scores.

Sure enough those are good credit score tips, but these actions take a long time. What if you’re house hunting and you just need a few extra points to bump you over the line to the great rates? When your score is below their cut, even just by a few points, you’re still considered as not creditworthy.

Start by pulling your credit report and your credit score to see where you are. Look for factors that could be affecting your score. Look for errors in the report, such as accounts that aren’t yours, late payments that were actually paid on time, debts you paid off that are shown as outstanding, or old debts that shouldn’t be reported any longer (negatives are supposed to be deleted after seven years, with the exception of bankruptcies, which can stay for as long as 10 years).

After repairing errors, the fastest route to a better score is paying down balances on credit cards. Though it’s not an instant cure, paying down credit lines over a two month period can boost your score a substantial amount, and may be enough to put it over the edge if you’re lurking just beneath the next tier of loan pricing.

If there are instances when you’ve paid your bills late in the past, good credit score tips mean paying every bill on time from now on. If you want to have a really good record with the credit agencies, pay your debt before it’s due and keep your balances low.

Another of those credit score tips if you’re just trying to boost your score is not to close unused accounts. Closing unused accounts without paying down your debt changes your utilization ratio, which is the amount of your total debt divided by your total available credit. If you do cut up cards, though, leave the oldest one open. The length of your credit is one of the things they consider in your score.

One good strategy for bringing up your score is to transfer balances from a card that’s close to being maxed out to other cards to even out your usage which provides credit tools to lenders. Or just spread out your charges between a few cards. This gives you a good boost in your score and makes you creditworthy in the eyes of lenders.

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