How Can I Fix My Credit Score? Many, many folks have found that their credit scores are less-than-appealing – especially in such a weak economy with so many layoffs and company restructuring efforts that have left tons of people jobless. Regrettably, it is a heck of a lot easier to lower your credit score than it is to increase it. Credit scores are measured on the Fair Isaac and Co. scale or FICO with the majority of lenders. Your FICO score is used to determine your creditworthiness or lack thereof. This score is compiled based on information that is reported about you and your borrowing habits to the three major credit reporting bureaus (Experian, Trans Union, and Equifax). Having a bad or damaged credit file makes your FICO score lower, which results in everything from denial of credit to denial of employment. Let's look at ways that you can increase this all important FICO score: "Fix My Credit Score" Tip #1: Verify the Accuracy of Your Credit Report It is crucial that the information being used to calculate your credit score is factual and up-to-date. All three of the above-mentioned bureaus may have a different accounting of your borrowing behavior, so it is important that you pull your credit report and score from each one. You can receive a free copy of your credit report once each year under federal law; you will be charged for your score, however. Look your three reports over carefully. Can you dispute any of the information that is contained in your credit file? Do you recognize any discrepancies and errors? Even simple items like a late payment that you actually made on time should be reported and disputed to the bureau holding the erroneous record. In many instances, the creditor will need to prove that a debt is valid in order for it to remain on file. Also keep an eye out for duplicate reports of the same negative item – this is a common mistake that occurs when debt is "sold" to collection agencies who may resell the debt to other companies. "Fix My Credit Score" Tip #2: Make Timely Payments The most important thing that you can do to be regarded as a responsible borrower (and to keep your credit score looking good) is to make timely payments. Thirty-five percent of your FICO score is based on your payment history (yes, more than a third). Pay on time, each and every time that your payments are due. "Fix My Credit Score" Tip #3: Pay Down Debt A whopping thirty percent of your FICO score is based on the amount you owe. A simple fix that can raise your credit score: pay down your credit cards and other installment-type loans. This doesn't mean moving the debt from one card to another, but actually eliminating it. Make small steps – like an extra $50 per month, if you cannot afford to pay a big chunk of your debt off at once. "Fix My Credit Score" Tip #4: Keep Your Oldest Accounts Open One of the biggest mistakes that can be made in regards to credit is closing old accounts. Newer accounts lower your score; older accounts raise the "average length" of your credit history – which is a good thing. Keep your older accounts in good standing, and don't run more than a thirty percent
balance on them as compared to the available credit you have. For example, if your Visa card has a $10,000 limit, run no greater than a 30% balance on the card at any time. "Fix My Credit Score" Bonus Tip: Visit AAAcreditguide.com Visit AAAcreditguide.com to see how I managed to remove my negative credit items including, charge offs, collections and even a bankruptcy! I increased my credit scores by over 200 points.