Improve_your_credit_score

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					Title:
Improve your credit score

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974

Summary:
What does “Credit Score” mean? A measure of credit risk calculated from a
credit report using a standardized formula. Factors that can damage a
credit score include late payments, absence of credit references, and
unfavorable credit card use. Lenders may use a credit score to determine
whether to provide a loan and what rate to charge.


Keywords:
credit,card,visa,mastercard,score,rating,bank,consumer,debt,consolidation
,identity,theft


Article Body:
What does “Credit Score” mean? A measure of credit risk calculated from a
credit report using a standardized formula. Factors that can damage a
credit score include late payments, absence of credit references, and
unfavorable credit card use. Lenders may use a credit score to determine
whether to provide a loan and what rate to charge.

Do you know what your credit score is? You won’t know what you need to do
to improve your credit score unless you first know what your credit score
is. To find out, order a copy of your credit report. An amendment to the
federal Fair Credit Reporting Act requires each of the major nationwide
consumer reporting companies to provide you with a free copy of your
credit reports, at your request, once every 12 months.

To order your free annual report from one or all the national consumer
reporting companies, visit http://www.annualcreditreport.com , call toll-
free 877-322-8228, or complete the Annual Credit Report Request Form and
mail it to: Annual Credit Report Request Service, P.O. Box 105281,
Atlanta, GA 30348-5281. You can print the form from ftc.gov/credit. Do
not contact the three nationwide consumer reporting companies
individually; they provide free annual credit reports only through
http://www.annualcreditreport.com , 877-322-8228, and Annual Credit
Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Under federal law, you’re also entitled to a free report if a company
takes adverse action against you, such as denying your application for
credit, insurance or employment, and you request your report within 60
days of receiving notice of the action. The notice will give you the
name, address, and phone number of the consumer reporting company that
supplied the information about you. You’re also entitled to one free
report a year if you’re unemployed and plan to look for a job within 60
days; you’re on welfare; or your report is inaccurate because of fraud.
Otherwise, a consumer reporting company may charge you up to $9.50 for
any other copies of your report.
To buy a copy of your report, contact:

Equifax: 800-685-1111; www.equifax.com

Experian: 888-EXPERIAN (888-397-3742); www.experian.com

TransUnion: 800-916-8800; www.transunion.com

For more information about credit card debt, identity theft, raising your
credit score, obtaining credit cards, and more you can also go to
http://creditcards.youngparentsmagazine.com

Under state law, consumers in Colorado, Georgia, Maine, Maryland,
Massachusetts, New Jersey, and Vermont already have free access to their
credit reports.

If you ask, only the last four digits of your Social Security number will
appear on your credit reports.

What can I do to improve my Credit Score?

Pay your bills on time. This is the big number one! It’s always good to
pay your bills on time and that keeps your credit score healthy. It is
especially important that all of your recent bills have been paid on time
if you intend to apply for new credit or a new loan. Recent late payments
weigh against your credit score tremendously.

Don't close or open credit card accounts near loan time. A good rule of
thumb is do not open any credit accounts near a time when you will be
applying for a loan. It can lower your credit score, especially if you do
not have a proven track record. What's more, a new account will lower the
average age of your accounts, another factor in your FICO score. (FICO is
an acronym for Fair Isaac Credit Organization) If you have several credit
card accounts but are only using a few of them, you'll raise your
balance-to-limit ratio if you close the unused ones.

Pay off debt rather than moving debt to other places. The ratio of your
credit card balance versus your credit limit is the key, so, closing out
an account and transferring the balance someplace else simply means you
increase that ratio, which is more than likely to lower your score.

Example: You owe a total of $1000 on four credit cards, each of which has
a $1,000 limit. Your total credit limit is $4,000, of which your total
balance ($1,000) accounts for 25 percent. If you transfer all your
balances to two cards and cancel the other two, your total credit limit
is reduced to $2,000, and your $1,000 balance now accounts for 50 percent
of that limit.

Reduce your credit card balances. A heavily weighed factor in your FICO
score is how much money you owe on your credit cards relative to your
total credit limit. Generally, it's good to keep your balances at or
below 25 percent of your credit card limit, said Jeanne Kelly, founder of
The Kelly Group in Brookfield, Conn., which helps clients improve their
credit scores.
Examine your billing statements for errors. This is a commonly overlooked
place to reduce debt. Companies do make mistakes. This includes examining
all of your bills, not just your credit card bills. Jennifer Tarzian
wrote more about this at http://www.youngparentsmagazine.com You’d be
surprised at how much money you recover due to correcting common billing
mistakes.

Correct blatant mistakes in your credit report. Your credit score is only
as good as what shows up in your credit report. Review your reports from
all three credit bureaus for accuracy once a year as well as several
months before applying for a loan. Changing a mistake on your report -
such as a payment that is wrongly labeled as late -- can take 30 days to
three months, sometimes longer. The way to obtain your credit score and
report is listed above in this article.

Healthy credit is important in today’s day and age. More information
sharing between companies has been made easier due to new technology, so
any blemishes on your credit will be known by all credit reporting
agencies almost immediately. Keeping up with your credit score and taking
steps to improve you credit score is essential, so take the time.

				
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