| Improving your Credit rating |
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Tips and Advice on Improving your Credit Rating
Pay all your bills on time. Late payments and delinquencies can lower
your score; liens, collections and bankruptcies are particularly
devastating.
Once you've addressed any discrepancies between your credit reports,
you can begin to correct any information that may be out-of-date or
inaccurate. Another step you can take is identifying any accounts whose
balances are over 50% of your allowed credit. Reducing these balances
to below 50% (optimally below 30%) is an effective way to improve your
credit score.
Punctuality is also important. Paying your bills on time is part of what
makes an optimal credit score. While it is a myth that checking your own
credit score often will have a negative effect on your rating, excessive
inquiries from lenders in a short period of time can bring your credit
score down. By giving yourself time, and sticking to this advice, you can
improve your credit rating.
* Keep balances low. Running up your credit cards to the maximum is a
sure way of hurting your score.
*Co-signing for a loan. This may help your friend or relative, but it won't
help you. When you co-sign for a loan, any late payment, judgement, or
default on that loan will show up on your credit history, which will lower
your credit score.
Pay all your bills on time. Late payments and delinquencies can lower
your score; liens, collections and bankruptcies are particularly
devastating.
Once you've addressed any discrepancies between your credit reports,
you can begin to correct any information that may be out-of-date or
inaccurate. Another step you can take is identifying any accounts whose
balances are over 50% of your allowed credit. Reducing these balances
to below 50% (optimally below 30%) is an effective way to improve your
credit score.
Punctuality is also important. Paying your bills on time is part of what
makes an optimal credit score. While it is a myth that checking your own
credit score often will have a negative effect on your rating, excessive
inquiries from lenders in a short period of time can bring your credit
score down. By giving yourself time, and sticking to this advice, you can
improve your credit rating.
* Keep balances low. Running up your credit cards to the maximum is a
sure way of hurting your score.
*Co-signing for a loan. This may help your friend or relative, but it won't
help you. When you co-sign for a loan, any late payment, judgement, or
default on that loan will show up on your credit history, which will lower
your credit score.
* Apply for credit sparingly. Each new credit card, loan and credit application affects your score, and lenders are wary of people
who have lots of open credit lines. How much credit you have available to you is factored into your score, whether you use the
credit or not.
* Close accounts carefully. Abruptly shutting down lines of credit can also hurt your score, especially if you carry a balance on any
card. The score measures the difference between your open credit lines and the amount you use, and a sudden decrease in credit
lines can make your debt loom larger. Consider paying down your balance while closing unused lines, and do so well in advance of
applying for a major loan, such as a mortgage.
* Keep your oldest credit lines. The length of your credit history counts, so consider hanging on to the credit card you got in college
even if you close other accounts.
* Time is your friend. The importance of bankruptcies and other black marks on your credit fades over time, as long as you
establish a more recent pattern of on-time payments.
Remember, knowledge is power when it comes to getting the best deal on your car loan. If you're a prime borrower who, out of
ignorance, has applied for a car loan with a subprime lender, chances are you won't be told that your credit score allows you to
obtain a much cheaper rate with a prime grantor. Thus, it suits you to know where you stand score-wise, so that you may target
appropriate grantors in your search for a loan. You can get an online credit report by visiting the Web sites of the nation's three
credit bureaus: Experian, Equifax and Trans Union.
who have lots of open credit lines. How much credit you have available to you is factored into your score, whether you use the
credit or not.
* Close accounts carefully. Abruptly shutting down lines of credit can also hurt your score, especially if you carry a balance on any
card. The score measures the difference between your open credit lines and the amount you use, and a sudden decrease in credit
lines can make your debt loom larger. Consider paying down your balance while closing unused lines, and do so well in advance of
applying for a major loan, such as a mortgage.
* Keep your oldest credit lines. The length of your credit history counts, so consider hanging on to the credit card you got in college
even if you close other accounts.
* Time is your friend. The importance of bankruptcies and other black marks on your credit fades over time, as long as you
establish a more recent pattern of on-time payments.
Remember, knowledge is power when it comes to getting the best deal on your car loan. If you're a prime borrower who, out of
ignorance, has applied for a car loan with a subprime lender, chances are you won't be told that your credit score allows you to
obtain a much cheaper rate with a prime grantor. Thus, it suits you to know where you stand score-wise, so that you may target
appropriate grantors in your search for a loan. You can get an online credit report by visiting the Web sites of the nation's three
credit bureaus: Experian, Equifax and Trans Union.