Helping to improve your credit score

 The Mortgage U! Mortgage Education Made Easy

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Dave Zwierecki
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Helping to improve your credit score
A good credit score requires a lengthy credit history. The older the account the more weight it has on your credit scores.
Notify the credit bureaus that all negative credit older than 7 years should be removed from their credit reports.

If you currently have a limited credit history, then it would be a good idea to get a secured credit card. Sometimes it is difficult to get a credit card or a loan with a limited credit history, and a secured card can help you build your credit.

If you currently have limited or no credit it is a good idea to see if a friend or family member with excellent credit can add you as a authorized user on their account. By being added on as an authorized user this can help you to establish a credit history quicker and help to increase your scores quickly. Make sure that your family member or whoever adds you to their credit card account checks with the creditor to make sure that they will report authorized users to the credit bureau. Not all creditors will do this.

You can improve your scores by paying down the balance on the credit cards where the balance is at or near the high credit limit. If you can't pay them down you may want to consider opening a new account and transferring half the balance over to the new account.

One of the main ways to improve your credit score is obviously to pay your bills before they become 30 days or more past due. Know which bills you have that report to your credit report. Utilities (home), some cell phone providers, cable or satellite tv, phone and internet service providers, and many other similar type bills do not report to credit. Knowing this may help with the timing of which bills to pay at what times of the month when money gets a little tight. Also, keep your credit card balances at 20-40% of the maximum credit limit. If you have a $1000 credit card limit on your Capital One credit card make sure that balance does not exceed $400 to maximize your credit rating and credit score. This is true for all credit cards or revolving credit you have. If your balance gets higher than 40%, you can try to call your creditor and request a limit increase and this can lower your percentage. When you pay off accounts do not close them. Keep them open and this will help you to establish a longer better looking credit history. Also, it is generally better to have credit balances spread over 3 or 4 credit cards than to have 1 card that is maxed out. Keep these tips in mind and they should help you to increase your credit scores.

If you have an older credit card in good standing and you pay it off, it would be wise to keep the account open. Many people make the mistake of closing their accounts once they are paid off. Since a large part of your credit score is based on the amount of time the account has been open (older accounts are better), this would actualy hurt your credit score.

Opening new credit accounts can actually lower your credit score. A new account can hurt if it gives you more than the optimum number of open accounts. Also, new accounts can reduce the average age of your credit accounts, which can hurt your credit score.

 

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 Information listed above is to be used for educational purposes only and is not guaranteed

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