Four Reasons why you need a Good Credit Score and Ten Tips on getting there.
Brittanee Janecek DHCU Community Credit Union Credit scores determine more than just whether or not you will be approved for a loan. In addition to loan approval, your credit score affects your interest rate on loans, the price you pay for homeowners and car insurance, and even whether you will be offered a job for which you have applied. It is important to remember that raising your credit score is like losing weight. It will take time and there is no quick fix. Making late payments can negatively affect your credit score within three or four months, whereas paying all of your bills on time can take six to twelve months before you see a rise in your credit score. Your FICO score is comprised of five factors. Below is a graph that illustrates the weight that is placed on each of the five factors.
The best way to ensure a good FICO score is to manage your credit responsibly over time and to follow these tips. Order a copy of your credit report each year. Notify the credit-reporting agencies of any incorrect information. Pay all of your bills on time. If you miss payments, get current and stay current. The longer you pay your bills on time the better your score. Don’t close unused credit cards as a quick-fix strategy to raise your score. Don’t open a lot of new accounts within a short period of time. Keep your balances low in relation to the amount of credit you have available. Pay off debt rather than moving it around. Rate shop within a focused period of time. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. Don’t get any deeper in debt. Save the credit card with the most favorable terms and cut the rest up.