| What is a Credit Score? | | | | bureaus don't divulge the exact methods they use to |
| A credit score is a somewhat of a complex | | | | compute scores, we do have these basic guidelines to |
| mathematical calculation that assess many types of | | | | go by. Do you have a credit history? How long is your |
| information in your credit file and then rates you based | | | | credit history? Have you recently applied for new |
| on the results. Lenders, insurers and employers use | | | | credit? What is your debt to income ratio? What types |
| your credit score to help determine whether you | | | | of credit accounts do you have and how many? Have |
| qualify for a particular job, mortgage, auto loan, | | | | you filed bankruptcy? Do you pay your bills on time? |
| insurance, credit card, service or other loan. Since this | | | | Do you have late pays, non-pays or any write offs? |
| credit scoring system has been in place, there have | | | | Do you have any liens or judgments? By having |
| been countless horror stories of people who had | | | | somewhat of an understanding on how they tally your |
| improper information on their credit reports. Others | | | | score, you can avoid making mistakes that would |
| found out that they were victims of identity theft and | | | | negatively affect your rating. |
| or credit card fraud. There is a number of ways your | | | | 3). Do Everything In Your Power To Pay Your |
| score can turn out less than what it should be. Here | | | | Obligations On Time |
| are some steps you can take to improve and correct | | | | One way to easily improve your credit score is to |
| your score. | | | | always pay your bills on time. Many businesses have |
| 1). The First Step To Improve Your Credit Score Is To | | | | set it up so that you access their automatic payment |
| Evaluate Your Credit Reports | | | | system. On the date that you set, they automatically |
| In order to evaluate your credit reports, you must | | | | deduct the payment from your bank account. |
| obtain copies of your reports from the three primary | | | | 4). Learn The Steps To Correct Errors On Your Credit |
| credit bureaus: Equifax, Experian and TransUnion. You | | | | Report |
| can obtain your reports a number of ways. You are | | | | Each credit bureau has a procedure in place to help |
| entitled to a free credit report if an entity denies you | | | | consumers dispute and correct issues on their files. |
| credit, a job or insurance. In some states, by law, you | | | | Learn them and be ready to take action to remove |
| are eligible for a free credit report from the three | | | | errors and outdated information. |
| credit bureaus on an annual basis. You can contact | | | | 5). Don't Over-Extend Yourself |
| each bureau directly or go through the Annual Credit | | | | One of the fastest ways to lower your score is to bite |
| Report Request Service. You can also purchase your | | | | off more credit than you can afford to pay back. |
| credit reports and scores directly from each credit | | | | People do this for numerous reasons. They use credit |
| bureau. Once you obtain them, make sure the | | | | cards to start a business and it doesn't pan out. The |
| information is correct. | | | | next thing they know, they're wallowing in an ocean of |
| 2). Know The Factors They Use To Determine Your | | | | debt that won't go away. The best advice any |
| Final Score | | | | financial advisor can give you is to live below your |
| Although the credit scoring companies and credit | | | | means. |