| iv id="body"> | | | | Use the following steps to raise your credit score |
| How important is it really to repair one's credit score? | | | | 1. Obtain a copy of your credit score report from |
| Credit scores are tantamount to one's purchasing and | | | | one of the three major credit bureau agencies: |
| borrowing power. Buying a new home, qualifying for | | | | Equifax, TransUnion or Experian. |
| a low APR credit card to shopping for a small | | | | 2. Thoroughly review your credit score for errors or |
| business loan all depend on a consumer's credit | | | | outdated information. Quite often, certain lending |
| history. A low credit score identifies that a consumer | | | | institutions are not due diligent on updating old |
| may be overextended in bills, is unable to manage | | | | information. Contact specific companies to request |
| accounts or has a poor repayment behavior. | | | | contest errors and request credit corrections. |
| What is a credit score? | | | | 3. When reviewing your credit report, use the above |
| The credit score is prevalently referred to as a FICO | | | | listed areas of evaluation to help raise your credit |
| score or a numerical portfolio of a consumer's | | | | score. |
| borrowing and bill repayment behavior. The | | | | 4. Because outstanding debt may taint a FICO score, |
| information contained in a credit report is very similar | | | | try to pay-off balances on both revolving credit |
| to a report card. FICO credit scores range between | | | | cards as well as other financial accounts. For the sake |
| 300 and 850. Credit scores above 850 are | | | | of appearances and the credit score, target bankcard |
| extraordinary. While a credit score of 300 is deemed | | | | debt to 60 percent with 30 percent towards |
| exceptionally unusual, FICO scores generally do not | | | | installment debt. (If you plan to obtain mortgage |
| fall under 500. | | | | approval, prove your ability to repay debt by paying |
| Annually, billions of credit approvals are determined | | | | down loans with installments - as much as possible). |
| based upon a consumer's FICO score. While credit | | | | 5. Closing unused accounts is a negative strategy to |
| scores represent personal financial records of | | | | raising one's credit score. Factually, fewer open |
| payment, a FICO scores are used to make other | | | | accounts with the same amount of debt ultimately |
| important lending and financing decisions: | | | | reduces a credit score. For example, a credit line of |
| * The dollar amount of a credit line or loan | | | | $20,000 worth of debt with $10,000 worth of |
| * Interest rate | | | | available credit represents a 50% debt ratio. By |
| * Pre-approval of credit cards | | | | closing a credit card in good standing with a zero |
| * The authorization of a cash advances | | | | balance and $5000 credit line, a consumer would be |
| * The type of cell phone service (pre-paid or | | | | raising their debt ratio to 67 percent and lowering |
| standard) | | | | their credit score. Target outstanding debt to |
| * The approval to rent an apartment | | | | account for only 20 to 30 percent of your available |
| Because credit scores use the last two-year's of a | | | | credit line. |
| consumer's credit card, borrowing and repayment | | | | 6. Instead of opening up a number of credit cards to |
| history, everyone has the power to improve their | | | | raise a credit score, find a credit card with a low APR |
| score. In order to understand how a credit score is | | | | to consolidate onto one credit card. However, caution |
| assessed, it's important to understand which | | | | is advised on people with a short credit life in opening |
| components of one's credit history are used to | | | | a number of credit cards because it can ultimately |
| calculate a FICO score: | | | | lower a person's credit score, accounts for 15 |
| * Payment History 35% | | | | percent of a person's credit information. |
| * Availability of credit and usage 30% | | | | 7. Make frequent payments. Credit scores maintain a |
| * Duration of open accounts with creditors 15% | | | | record of how often or late a person remits |
| * Credit inquiries (the number of applied credit cards) | | | | payment. Since frequent payments account for 35 |
| 10% | | | | percent of a person's credit history, the strategy can |
| * Composition of credit file - bankcard versus | | | | be quite effective in raising one's credit score. |
| installment debt 10% | | | | |