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5 Ways to Improve Your Credit Score

Admin — Sat, 29 Jan 2005 03:54:00 -0800

Staff Writer Jeanne Sahadi at CNN/Money has a great article about improving your credit score. In this article she covers 5 steps to better credit. Here is a summary from that article.

1) Correct blatant mistakes. Your credit score is only as good as what shows up in your credit report. Review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan. Changing a mistake on your report - such as a payment that is wrongly labeled as late -- can take 30 days to three months, sometimes longer.

2) Pay your bills on time. This is always a good practice, and it's especially critical that you make prompt payments close to the time you need a loan. That's because a late or missed payment in the last few months is likely to lower your score much more than an isolated late payment five years ago.

3) Reduce your credit card balances. A heavily weighted factor in your FICO score is how much money you owe on your credit cards relative to your total credit limit. Generally, it's good to keep your balances at or below 25 percent of your credit card limit, said Jeanne Kelly, founder of The Kelly Group in Brookfield, Conn., which helps clients improve their credit scores.

4) Pay off debt rather than moving it around. Since the ratio of your credit card balance to your credit limit is key, closing out an account and transferring the balance simply means you increase that ratio, which is likely to lower your score. In other words, say you owe a total of $2,000 on four credit cards, each of which has a $2,000 limit. Your total credit limit is $8,000, of which your total balance ($2,000) accounts for 25 percent. If you transfer all your balances to two cards and cancel the other two, your total credit limit is reduced to $4,000, and your $2,000 balance now accounts for 50 percent of that limit.

5) Don't close unused credit card accounts near loan time. If you have several credit card accounts but are only using a few of them, you'll only raise your balance-to-limit ratio if you close the unused ones. You also shouldn't open new accounts when applying for a loan if possible. If you have a short credit history or very few accounts, opening a new credit line may lower your score since you don't have a proven track record, said Jan Davis, an executive vice president at TransUnion. What's more, a new account will lower the average age of your accounts, another factor in your FICO score.

This article is a great read, and if you get the chance, I would suggest to read the whole article.

Source: CNN/Money

URL: http://money.cnn.com/2002/02/15/debt/q_fivethings_creditscore/

A Credit Score is a Sum Used by Lenders as an Indicator of how likely you are to Repay your Loans.

Admin — Thu, 27 Jan 2005 02:06:00 -0800

What is a credit score? A credit score is a sum used by lenders as an indicator of how likely you are to repay your loans. Your credit score is generated by a mathematical formula utilizing the data from your TransUnion, Equifax or Experian credit reports. Lenders have been using credit scores as part of the lending decision for over than 20 years. What factors influence my credit score? Various factors determine your credit score, including the following:

Give Yourself Credit: Make Resolutions to Improve and Protect Your Credit/ Improve Your Credit Score

Admin — Sun, 23 Jan 2005 10:31:00 -0800

Control Your Debt - Credit Repair Advice & Articles :: Give Yourself Credit: Make Resolutions to Improve and Protect Your Credit Previous: How to read your credit report Next: Nonprofit offers cures for post-holiday debt hangovers Give Yourself Credit: Make Resolutions to Improve and Protect Your Credit by Admin at 06:46PM (PST) on January 10, 2005 | Permanent Link | Cosmos Your Credit Card Companies Provides Advice for Sticking to Those Resolutions The season for resolutions is upon us and it's time to make a commitment to improving and protecting your credit. Making a few small changes in financial habits ...

Improve your Credit Score - Facts, Information & Tips to Improve your Credit Score

Admin — Mon, 10 Jan 2005 22:48:00 -0800

Top 5 Credit Misconceptions We have all heard the rumorsfrom neighbors, relatives or friends. There are a wide variety of myths floating around about what you should and shouldn't do to improve your credit reports and credit scores. The buck stops here! TrueCredit has exposed these urban legends to provide you and your informers with the truth about credit:

Holiday shopping affects credit scores dramatically! - Average of 160 credit points!

Admin — Sun, 21 Nov 2004 05:46:00 -0800

Credit report scores drop dramatically due to delinquent payments from overspending during the holiday season which begins next week. SPENDonLIFE.com (http://www.spendonlife.com), a consumer savings website that provides credit reports, advises holiday season shoppers to keep a close eye on their expenses this year in order to avoid a credit report nightmare. A study by Experian Consumer Direct reveals that consumers with one missed payment in the last year have an average credit score of about 160 points lower than the average of those with no delinquent payments.

"A 160 point difference in your credit report history can mean paying hundreds or even thousands of dollars more on mortgages, car loans, or insurance, says SPENDonLIFE.com President Mark Henry. Late payments are not something to take lightly. Consumers should not spend money they cannot pay back."

Read the full article here.

Consumer Credit Scores Drop Due To Delinquent Payments Incurred During Holiday Shopping Season

Admin — Thu, 18 Nov 2004 05:52:00 -0800

(PRWEB) November 19, 2004 -- Credit report scores drop dramatically due to delinquent payments from overspending during the holiday season which begins next week. SPENDonLIFE.com (http://www.spendonlife.com), a consumer savings website that provides credit reports, advises holiday season shoppers to keep a close eye on their expenses this year in order to avoid a credit report nightmare. A study by Experian Consumer Direct reveals that consumers with one missed payment in the last year have an average credit score of about 160 points lower than the average of those with no delinquent payments.

“A 160 point difference in your credit report history can mean paying hundreds or even thousands of dollars more on mortgages, car loans, or insurance,” says SPENDonLIFE.com President Mark Henry. “Late payments are not something to take lightly. Consumers should not spend money they cannot pay back.”

The study indicates that 55 percent of U.S. consumers have at least one delinquency on their credit file and 34 percent have a delinquency in the last year.

Read the full article here.