| There are few situations that are as overwhelming as | | | | you've ever filed bankruptcy. |
| debt, and sometimes payments can seem impossible. | | | | 30% is based on your outstanding debt. How much |
| Many times, people get so caught up in worrying about | | | | do you owe on car loans, home loans, or other loans? |
| making payments that they forget to even look at | | | | Do you have more than one credit card? |
| what the debt is doing to their credit score. When | | | | 15% is based on how long you've had established |
| you're struggling just to make payments does your | | | | credit. Lenders like to be able to see a few years of |
| credit score really matter? | | | | credit history. |
| Well first off let's look at what credit ratings are used | | | | 10% is based on new credit. If you've recently |
| for. Loans are the most common thing people think of | | | | opened a new credit account that will reflect poorly on |
| when they hear credit score. If you ever need to | | | | your score. |
| borrow money you can be sure that lenders will check | | | | 10% is based on type of credit. If you've had |
| your credit history. This not only helps determines if | | | | several different types of credit accounts that will look |
| they will lend you the money, but also helps determine | | | | better for you score. Just credit card debt does not |
| what your interest rates will be. Some people suggest | | | | look good. |
| getting loans with low interest rates to help pay off | | | | Now that you have a better idea of what makes up |
| credit card debt. However, if you have a low credit | | | | your credit score let's take a look at some ways that |
| score, then you will be considered a higher risk to the | | | | you can improve your credit score, especially if you're |
| bank and they will compensate by increasing your | | | | trying to consolidate credit card debt. |
| interest rate. Remember that generally, the higher your | | | | Improving Credit Score |
| credit score, the lower your interest rate. | | | | Many people try to put all of their credit cards into one |
| Other instances when your credit score is important | | | | account that has a lower interest rate. You need to be |
| would be buying a car, mortgaging your home, and | | | | careful when doing this. If you're trying to consolidate |
| maybe even getting a job. Yes, it's true that some | | | | credit card debt and you want to transfer balances |
| employers will check your credit history to see how | | | | here are a few things you should know. |
| you manage your finances. Whether trying to | | | | 1. Opening a new credit card account will lower your |
| consolidate your credit card debt or just trying to | | | | credit score a bit. However, if it can help you pay off |
| maintain a good score, let us give you a better idea of | | | | your debts sooner than that may be ok in the end. |
| how you can improve your credit rating. | | | | 2. If you're going to transfer your credit card debt to an |
| Credit Score Breakdown | | | | account with lower interest make sure the credit limit |
| First, take a look at how your credit score is | | | | isn't too low. If it looks like you're about to max out |
| determined. Many people think that credit scores and | | | | your credit card then that can negatively affect your |
| credit reports are the same thing. In actuality your | | | | score as well. |
| credit score is based on your credit report. The report | | | | 3. Look at transfer fees. Some companies will actually |
| is basically a history of your financial actions. It includes | | | | charge the balance transfer as a fee, and that can |
| current credit accounts, your payment history, how | | | | really build up. See if there is a cap on how much they |
| you've used your credit, and if you've ever filed for | | | | can charge you. |
| bankruptcy. From these reports compiled by the three | | | | 4. Don't close your old account. It doesn't make a lot of |
| national credit bureaus, the Fair Isaac Corporation will | | | | sense, but it can negatively affect your old account if |
| determine what your credit scores are. Although FICO | | | | you close it. |
| does not reveal exactly how they calculate scores, | | | | Some final tips for raising your credit rating are to |
| they have revealed some important factors that are | | | | make sure that you make your payments on time. |
| included in their formula and their approximate | | | | Also try to get all your credits to 25% of the credit limit. |
| contribution: | | | | Finally limit the number of accounts you open, and don't |
| 35% is based on your payment history. This | | | | be afraid to get help in consolidating your credit card |
| includes how quickly bills are paid, how many bills are | | | | debt. It may negatively impact your score in the short |
| paid late, if any bills were sent for collections, or if | | | | run, but will help you out in the future. |