Whether you need to raise your credit score just enough to qualify for a loan, or whether you’re trying to reach that “magic 740″ to get the best rates and terms offered, there are some small things you can do to boost your scores.
The first step, of course, is to know where you stand today. So first, get your free credit report and read it carefully.
Step one is to dispute any errors that might be dragging you down. These would include any negative items that just aren’t yours – and yes, that happens. Experts say that 70% of all credit reports contain errors.
Next check to see that reported credit limits are accurate and that all accounts you’ve paid on time are listed correctly. Then, if you’ve had a bankruptcy, check to see that all included accounts have been removed from your report.
While you’re getting that out of the way and making sure that your credit report is accurate, you can begin steps to raise your score.
Step one: Apply all extra funds to your credit card accounts rather than your mortgage, car loan, or student loans. For whatever reason, paying down credit cards has a more dramatic impact on your scores than paying down other obligations.
Next, cut back on credit card use. Limit your outstanding balance to 30% or less of your credit limit, and work to see that the balance reported to the credit bureau each month is not the same as the month before.
Credit card companies report your balance as of the current statement. They do NOT report that you paid in full last month and thus the new balance is all new charges.
The trick you can use here is to keep track of when your statement is issued each month. Then go on line a few days prior to the statement being issued and make your payment. Now you’ve widened the gap between what you owe and your credit limit.
Credit scoring models love old credit cards, but only if you actually use them. So if you have an old card, take it out and use it every month or so. You don’t have to carry a balance, just show activity, so that the credit card issuer will resume reporting it to the credit bureaus.
The second benefit of occasionally using your old card during today’s confusion is that you lessen your chances of the card issuer canceling the card. They don’t like to keep inactive cards on the books, so if you don’t use it, you could lose it. And of course, the closed account reduces your available credit and thus lowers your credit score.
Author: Mike Clover
CreditScoreQuick.com your resource for free credit reports, credit cards, loans, and ground breaking credit news.
