| Unless you've already got a very high credit score, one | | | | credit score, so avoid them at all costs. In fact, your |
| in the 800 range or better, you need to know how to | | | | credit history is the most influential component of your |
| fix it. Your credit score follows you around like a lost | | | | credit score. It should go without saying, but keep |
| dog looking for a home, and can not only get you the | | | | accounts out of collection. Collection actions can follow |
| financing you need for a home or car, but can get you | | | | you around for 7 years, and obviously have a negative |
| the best rates too. To top it off, your credit score | | | | impact on your credit score. |
| helps control how much you pay on everything from | | | | Your credit score is views recent credit history more |
| credit to life and car insurance. As such, your credit | | | | heavily than your activity farther in your past, so if |
| score is one of the most important numbers in your life | | | | you've had a few fairly recent late payments, simply |
| except for maybe your blood pressure and | | | | waiting for a year or so while continuing to pay your |
| cholesterol, and a low credit score can raise your | | | | bills on time will raise your score too. After the late |
| blood pressure to unhealthy levels. | | | | payments are approximately 24 months behind you, |
| These days your credit score is vitally important. That's | | | | they will not have the same impact on your score. |
| true not just when trying to get credit, as in the past, | | | | If your balances are high, simply paying them down |
| but for many more mundane parts of your daily life. | | | | can have a dramatic, positive effect on your credit |
| One are where credit scores are used extensively is | | | | score. Reducing high balances on revolving accounts |
| in the insurance industry. Many service providers, such | | | | will go a long way toward fixing a low score. This has |
| as insurance companies have found they can | | | | an effect on 2 key components of your score; credit |
| correlate risk to your credit score with a fairly high | | | | utilization percentage and total outstanding debt. |
| degree of accuracy. You know what that means; as | | | | Together, these 2 factors account for about 40% of |
| your credit score falls, your insurance rates rise. | | | | your credit score, so you can see how optimizing them |
| Another area that you may be aware of where your | | | | will help fix your credit score. The credit utilization score |
| credit score can make a big difference is the rental | | | | indicates someone's available revolving credit as a |
| market. You may find yourself hard pressed to rent an | | | | percentage of their total revolving credit. For example, |
| apartment with an abysmal credit score. In some tight | | | | if you have 4 credit cards with limits totaling $20,000, |
| rental markets, your score doesn't even have to be all | | | | and you owe $10,000 on them, you have a 50% credit |
| that bad. If the market is tight, landlords can afford to | | | | utilization score. |
| be more selective, and one of the criteria they'll use to | | | | Something else that is affected by high balances that's |
| help select renters is their credit score. Experience has | | | | not actually part of your credit score, but does affect |
| shown that, as with insurance, there is a correlation | | | | you ability to get a mortgage is your debt to income |
| between the reliability of a renter and their credit score. | | | | ratio. Although your amount of total debt is a very |
| The lower the credit score, the more the landlord has | | | | large part of your credit score, the actual debt to |
| to worry about. | | | | income ratio isn't. Typically, lenders want to see both a |
| On top of all these other things, a low credit score will | | | | high credit score and a total debt to income ratio of |
| of course make it more expensive to get credit of all | | | | less than 36%. They'll use these when calculating how |
| kinds; from auto loans to mortgages. With the recent | | | | much home you're able to afford, and if they'll extend |
| shakeup in the sub prime mortgage market, | | | | financing to you at all.. In the opinion of many financial |
| prospective borrowers may find it difficult to secure a | | | | advisors, 36% is way too high and leaves precious little |
| mortgage if their credit score strays too low. | | | | room for error down the road. A figure of 20 - 22% is |
| Given the disaster that is a low credit score, if yours is | | | | a more conservative number many experts are far |
| low, you'll probably be looking for ways to fix your | | | | more comfortable with. |
| credit score. It is possible to fix your credit score, and | | | | Other things that are used to calculate your credit |
| there are some basic techniques you can use to do | | | | score are the length of your credit history and the |
| the fixing. First and foremost you should order a copy | | | | number of recent credit inquires by prospective |
| of your credit report from one of the three major | | | | creditors. The length of your history can be fixed by |
| reporting agencies; TransUnion, Equifax, or Experian. | | | | simply waiting for a period of time after you have |
| You are able to order one report free of charge each | | | | opened your first credit accounts. That will lengthen |
| year from each of the agencies. You should stagger | | | | your credit history. |
| them so one will arrive approximately every three | | | | Credit inquires by creditors are known as "pulls" in the |
| months. You'll use the first one as a baseline so you'll | | | | credit industry. There are 2 types; hard and soft. You |
| be aware of any future changes. | | | | need to be concerned only with hard pulls. They are |
| Once you receive your free credit report, set about | | | | generated when a prospective creditor checks your |
| poring over it thoroughly so that you can determine if | | | | creditor. That happens every time you apply for credit, |
| there are any errors. It's not at all uncommon for credit | | | | weather it's for a store card, a major credit card or a |
| reports to contain mistakes. In fact, according to | | | | car loan. Every one of these will lower your credit |
| recently published estimates, between 20 - 25% of | | | | score by about 5 points for 6 months, so if you're |
| credit reports have mistakes that can affect your | | | | going to be financing a car or getting a mortgage in the |
| credit score. Sadly, it's usually for the worse. If you do | | | | near future, do not apply for other credit. The |
| find any mistakes, you'll have to contact the creditor | | | | exception to this would be if you have no credit at all |
| and the reporting agency to get them cleared from | | | | and are trying to establish a credit history before |
| your report. | | | | applying for your loan. |
| Once your credit report is accurate, you'll want to raise | | | | If you know you'll be financing a vehicle or getting a |
| your score as high as possible so you can get the | | | | mortgage in the near future, a little legwork on your |
| best interest rates and other credit terms. First of all, | | | | credit score no could save you big money for years |
| there are some things you don't want to do if you're | | | | to come. So, stay away from late payments, but |
| aiming to fix your credit score. The most important | | | | almost as important, you must keep you debt at |
| thing not to do is pay your bills late. Late payments, | | | | manageable levels. |
| especially those over 90 days, are disastrous to your | | | | |