If you decide to use a lending institution, your ability to buy will be based on your credit score. Do you currently know yours? Here is some advice from Stephanie AuWerter, Editor of Smartmoney.com, on learning and improving your score.
During times like these, a good score should be top priority. Because of the current and ongoing credit crisis, lenders have got tough in credit score requirements. If you are looking for a mortgage, credit card, small business loan, the bar has been raised. If you want to get the best rates your FICO scores needs to be high. According for Fair Isaac credit scores range between 300 – 850 and you should shoot for a 750 or higher. The great news is you can improve your credit score fairly quickly. The first step is to know where you stand, and you can pull a copy of your FICO score at CreditScoreQuick.com
One of the worst things you can do to devastate your credit score is to be lat on a payment. If for some reason you pull your credit report and there is a late payment you knew nothing about, you usually can call to get the late payment removed if you are a good paying customer. If you were actually late, you can still call and ask them to remove the late payment, but of course they have no reason to re-move it. But it does not hurt to ask, you have nothing to loose.
You should also pay down your credit card debt. Credit card debt hurts your score. FICO does not like to see your credit card debt reaching its credit limit. This can be a little tricky because some credit card companies are lowering credit lines for some customers. According the Fair Issac you want to keep your credit card balances below 30% of your total credit line. So pay down your debts.
Don’t cancel credit cards you don’t use. Credit cards that have no balances actually are helping your fico score. Having credit cards with credit lines help your credit score, and it does not hurt to charge occasionally on it and pay it off that month.
Finally correct credit report mistakes. Almost 80% of credit reports have mistakes on them, 29% of which are serious enough to result in a credit denial. So pull a copy of your credit report with credit scores and give it a good review. Get a copy of your credit report at http://www.creditscorequick.com/. If you find a mistake on it the bureaus has 30 days to remove it if the credit bureau finds that the dispute is accurate.
CreditScoreQuick.com
