Do You know how important your credit score is? For many years lenders considered many factors in assessing the credit worthiness of an applicant including income to debt ratio, work history, bank records and general references. Things have changed and your credit score is all important. It's not hard to make an improvement in your score and this will affect the rate you are charged, the kinds of loans available to you, the down payment and the amount you can borrow. Read my tips for getting your credit score up and keeping it up. Find out your credit score.
TIPS ON RAISING YOUR CREDIT SCORES AND KEEPING THEM UP
Try out these five simple steps to improving your own credit score you could see dramatic results!
1. PAY YOUR PAST DUE ACCOUNTS.
Yes, this sounds obvious, but understand that credit scoring software severely penalizes you for having accounts with a past due balance. Making sure all of your accounts are current, and paying the amount that shows as being past due on the credit report can increase your credit score by a significant amount.
2. TRY TO "GET RID" OF YOUR LATE PAYMENTS.
Contact all creditors that have reported late payments on your credit and request a good faith adjustment that actually removes the record of late payments reported on your account. Be persistent, if they refuse to remove the late payments at first, remind them that you have been a good customer that would deeply appreciate their help.
3. REQUEST TO HAVE YOUR CREDIT LIMITS INCREASED.
Contrary to popular belief, having low credit limits on a credit card can actually hurt your credit score when the balance owed is 50% or above the limit assigned. The lower the percentage of debt to available credit the better, as it shows you are able to handle having credit available without running it up to the max.
4. DO NOT CLOSE YOUR OLD CREDIT CARDS, KEEP THEM ACTIVE.
15% of your credit score is determined by the age of the credit file. Therefore, even if your old credit cards have horrible interest rates, closing those cards will decrease the average length of time you´ve had credit3;as well as increase your "debt to available credit ratio" as discussed in point 3. Use the old card at least once every six months to avoid the account rating to change to "Inactive". An inactive account is ignored by Fair Isaac´s credit scoring software, so you will not get the benefit of the positive payment history and low balance that card may have had in the past.
4. BECOME AN "AUTHORIZED USER".
If you have a short and limited credit history, you can ask someone to add you to their credit card account as a joint account holder or an authorized user. When added, the primary account holder´s credit card will appear on your credit report. Credit scoring software will treat the added account as though it is your account and you will benefit from the low balance and the long payment history for that account. Being an authorized user is potentially detrimental to your credit score if the person giving you the card either maxes out the credit or pays late, since this would report on your credit report too.
These tips were provided by Carol Deal, HPW Mortgage
Please contact her if you would like more information about the dramatic difference an improvement in your credit score can make for you. 919-869-8742
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