home loan finance blog
Your credit score is a significant part of your overall credit history. It is a number based on the information in your credit file that shows how responsible you are with your credit.
The higher your score the more likely you are to get a credit card or loan. The lower your score, the more of a risk you are considered.
The first thing you need to do is find out what your credit score is. There are three major bureaus that you can get your score from : TransUnion, Equifax and Experian. Your score can range anywhere from 300 to a perfect 850. Once you know your score, follow these tips to help improve your rating:
1) Pay your bills on time. Late payments can have a significant negative impact on your score. You can raise your score as much as 20 points just by paying on time for one month.
2) Keep balances low on credit cards. Maxing out your credit cards could lower your score by as much as 70 points.
3) Dont open too many credit cards that you dont need. New accounts will lower your average account age. This could lower your score by as much as 10 points.
4) Manager your credit cards responsibly. In general, having credit cards and installment loans will raise your score, as long as you make timely payments.
5) Dont close old accounts. This could lower your score by lowering the average account age.
6) Report any errors to the credit bureau. Be sure to explain exactly what the error is. You may have to write a letter both to the bureau and the creditor.
If your credit score is low, dont despair! By following the above tips you can raise your score and your overall credit rating in just 8-10 weeks. You may even want to consider signing up for a credit monitoring service so you can keep track of your credit and be alerted when your credit profile changes.