Easy Ways to Improve Credit Scores

To put it simply, the higher your credit score, the lower your mortgage rates are going to be! Below I have listed things you can do that will help boost your credit score, that may save you money! A good resource for credit scores can be found here: free credit score without credit card, free credit score Things to do to improve your credit score Monitor your credit report and score - The initial step of improving your credit score is knowing your credit report and score. Monitor your credit report on a monthly basis to find any inaccuracies that ought to be disputed with the three major credit bureaus. Are you aware that over 70% of credit reports have erroneous information that may negatively impact your credit score? Pay every account on time - This should actually be obvious but it never hurts to reiterate. It's essential to pay your bills promptly. Did you know that payment history is among the most important factors that affect your credit score? Over 30% of your credit score depends upon the on-time payment history. Pay off collections - If you can, negotiate to take off those from your credit report entirely, and make sure you will get it in writing. Paying completely will be the next best choice, although you may can't get them to remove the actual line item; a paid collection is treated more favorably than an open collection account. Keep your credit card balances low - Credit scoring models usually do not look favorably on balances that are approaching you credit limit. The most effective technique for credit cards is usually to charge a small amount and pay in full each month. The next best strategy is to keep your balances as low as possible; you can expect to have a significantly higher credit score if you can keep the balance under 30% of your total credit limit. Pay your highest interest debt first - If you've multiple trade lines, you'll super-charge your debt reduction strategy by making additional payments on your highest interest debt first. With less to spend toward interest, you'll have more to go to principal.Things that have a negative impact on your credit score Don't close old credit cards - Many individuals think they are able increase their credit score by closing unused credit cards, but this isn't necessarily the case. Open unused credit cards actually help your score by reducing your credit utilization - the total balance versus the whole credit limit. All credit scoring models look at your outstanding balances in relation to your credit limits. Don't open new accounts- In the long term, more credit may help your score, but new accounts can work against your score in the short term. If you are planning on financing a big purchase like a residence or a auto, avoid trying to get and opening new credit unless it's essential. When looking for credit, like a new credit card, the creditor will run a credit check, thus slightly reducing your score in the short-term. Don't pay that old charge-off - Often, consumers think that they could improve their score by dealing with old charge-off accounts. Dealing with an old charge-off can actually work against you. Charge-offs will fall off of your credit report after seven years.

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