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Improving
Your Credit Score
"MY
CREDIT SCORE IS NOT AS GOOD AS I WOULD LIKE IT TO BE. ARE THERE ANY WAYS
THAT I CAN IMPROVE MY SCORE?"
The
most important factor that affects credit scores is late payments. To
put it simply: pay your bills on time. This may seem obvious, but
many people fail to do this. Remember that a recent late payment affects
your credit rating more than a late payment from a year ago or several
years ago. Also, keep an eye on your “revolving credit,” namely your
credit cards. A good rule of thumb is to keep your balances around 25
percent of your total credit limit. Opening new credit card accounts or
“spreading” around your balances probably won’t improve your
credit rating because your credit score may be lowered if you have newer
accounts. As for old or unused credit card accounts, don’t close them.
By closing unused accounts, you will increase your ratio of debt to
credit limit, thus lowering your score. The key to credit cards is to
pay them off. Finally, check your credit report for any errors that may
reduce your credit rating. If you encounter any errors, check with the
consumer reporting agency and your lender. It may take up to thirty days
to correct any mistakes, so you should check your own credit report at
least a month or two before you start the home buying process. ∆ |
