If you’ve ever bought anything on credit, borrowed money from a bank or credit union, or taken out an auto loan or school loan, you have a credit report with your name on it at the three major credit reporting bureaus – Equifax, TransUnion and Experian. Along with your credit report, you also have a ‘credit score’ that gives potential creditors an idea of how risky it might be to extend credit to you. The most popular credit scoring entity is the Fair Isaac Corporation. This is where the name – FICO Score – came from.

Your FICO Score is a three-digit number between 300 and 850. A FICO Score is simply a snapshot of your financial standing at a point in time. Your score can go up or down depending on activity within your credit report. Your FICO Score can determine whether you get the loan or credit card you applied for, or what your interest rate will be on your mortgage or auto loan. Even though there are various ways to access your credit reports at no charge, you will usually have to pay a fee to get your FICO Score. If you are trying to buy a house or make any other large purchase on credit, it would help you to know your credit score before you apply.

Who might use your credit score to make a decision about you? A lender, utility company, cell phone company, insurance carrier, employer or potential employer, military if you need a security clearance, property rental agencies. A good credit score can help you impress lenders that you are not high risk and you’ll be able to qualify for credit more quickly.

The FICO Score is determined by a formula weighting the following:
35% Your payment history
30% The amounts you still showing owing
15% Length of your credit history
10% How much new credit you’ve recently received
10% Types of credit you’ve used

Just to give you an idea of a “good” FICO score: With 720 or higher you’d be able to qualify for a home mortgage with the lowest interest rates. With 620 or higher, you may be able to qualify for an FHA loan or other lender with higher interest rates. With a FICO score lower than 620, you probably wouldn’t qualify for a home mortgage in today’s market. Your credit score, of course, would be considered along with income, length of employment, etc.

The first step to improving your credit score is finding out what it is. But after you know your score, here are actions you can take to improve it:

1. Pay your bills on time. If you’ve been late, get current and stay current. Late payments hurt your credit.
2. Seriously pay down debt. On credit cards, try to get the balance owed below 30% of the amount of your credit allowed on that card.
3. Even if you pay off credit cards, keep the account open so it can build your longterm credit.
4. Don’t apply for too much new credit all at once. Too many inquiries can hurt your credit.
5. Manage your available credit responsibly and your credit score will grow over time.

Credit is more important than ever these days. If your credit score is in the dumps (and an amazing number of people suffer from bad credit), you need to know how to improve it. Better credit will allow you to enjoy lower interest rates on credit cards and loans, and you’ll find that you qualify for financing that you didn’t before. How do you improve that credit score, though? Here are five of the best options for boosting your credit score.

1. Check Your Credit Report – Your credit report is the key to your credit score. You need to make sure you check it once per year (you get 1 free report each year from each of the 3 major credit bureaus). Checking your report annually will help you ensure that each listing on the report is accurate. If you find items that are not yours, dispute them immediately. Credit reporting agencies make mistakes too, and reporting the item will help improve your credit score.

2. Start Catching Up on Payments – One of the most important things to do is to start paying off your debts. If you have unpaid balances that are past due, these need to be taken care of. 35% of your credit score is made up of payment history, so the more past due accounts you can change to “paid in full”, the better your score will be. Start small if you have to, but start paying off any debts on your credit report listed as past due.

3. Don’t Apply for New Credit – It can be tempting to apply for new credit cards, particularly when you’re bombarded with “pre-approved” letters in the mail. However, it’s important that you avoid opening any new accounts. Not only does this keep you from any additional spending, but too many credit inquiries will reduce your credit score as well.

4. Don’t Close Accounts – Some people recommend closing your accounts, especially if you’re behind on payments. However, closing a credit card account while there is still a balance owed will have a negative effect on your credit score. Keep those accounts open and pay them off. Once they’re paid in full, you can consider closing them. Even once it’s paid off, you might consider keeping a few accounts open so that the lender continues to report your credit limit to the bureaus.

5. Reduce Your Debt-to-Income Ratio – If you have a high debt-to-income ratio, chances are good that your credit score is lower than it should be, even if you are current on your payments. Find out if your lenders will raise your credit limits, or consider cancelling some of your accounts. Sometimes, too much credit is a bad thing.

Bad credit can be crippling. It can force you to pay exorbitant interest rates, and even put you out of consideration for financing. However, with the five tips listed above, you can begin rebuilding your credit and regaining your life.

Is your credit report not quite as good as you would like it to be? You can fix that and make it look great in just a matter of time. Follow our tips and you will see just how easy it is for you to repair your credit report.

Look into the credit bureau disputes procedure. It is a bit of an art to get the results that you seek, but if you hire a professional to draw up the letters, you may see the reduction of the money that you owe certain creditors, Additionally, you may even have things on your credit report completely removed.

To improve your credit history, ask someone you know well to make you an authorized user on their best credit card. You do not need to actually use the card, but their payment history will appear on yours and improve significantly your credit score. Make sure to return the favor later.

To fix bad credit, restrict yourself from borrowing any more money. Ask yourself if you can really afford what you want to buy, and if you really need it. By reducing your unnecessary expenses on a daily basis, you should be able to set enough money aside to pay back your creditors.

Having between two and four active credit cards will improve your credit image and regulate your spending better. Using less than two cards will actually make it more difficult to establish a new and improved spending history but any more than four and you may seem unable to efficiently manage spending. Operating with about three cards makes you look good and spend wiser.

The most common hit on people's credit reports is the late payment hit. It can really be disastrous to your credit score. It may seem to be common sense but is the most likely reason that a person’s credit score is low. Even making your payment a couple days late, could have serious impact on your score.

If you are trying to re-build or repair your credit than a secured credit card may be right for you. A secured credit card works like a savings account, where you deposit the required funds and that will be your credit card limit. Some of these secured cards do have fees, so check into that before applying.

Make an attempt to repair your credit yourself. Sometimes organizations can help, but there is enough information online to make a significant improvement to your credit without involving a third party. By doing it yourself, you expose your private details to less individuals. You also save money by not hiring a firm.

Keep about five strong credit card accounts open to improve your score, but don’t use them. Credit cards that are in good standing and carry low balances can improve your credit score. If you close such accounts, it will have the opposite effect and negatively impact your score.

In order to best manage your finances and your credit score, you should never max out a credit card. The best thing to do is to never charge more than thirty percent of your credit limit. Having a high percentage of your available revolving credit being used will reduce your credit score. Also, high balances take longer to pay off and accumulate more interest.

If you are having a hard time paying all your credit card bills on time, you may want to look into a credit consolidating company. They can combine all your credit card debts to one bill. This way you will have one payment that you can focus on making and you don’t have payments spread out everywhere.

If you have hurt your credit and have realized the damage you have done, it is important to start by actually paying what you owe. If you need pay your credit card bills, you need to find a job even if it is at McDonald’s. If you do not pay your card off, your credit will never get better.

Nothing will repair your credit other than time. If you have late payments, defaults or even bankruptcy, your score will go down. There is no way to remove these once they have been reported. Only time and good behavior will eventually make them less and less of a determining factor in your score and the credit that you receive.

If you have credit cards, make sure you’re paying off the entire balance at the end of the month. This will help keep you from getting into a spiral of debt. If you let your credit card bills start piling up, it becomes nearly impossible to pay them all off.

Just because your credit needs repair, does not mean that no one will give you credit. Most creditors set their own standards for issuing loans and none of them may rate your credit history in the same manner. By contacting creditors informally and discussing their credit standards and your attempts to repair your credit, you may be granted credit with them.

If you are trying to repair your credit score, it is important that you obtain a copy of your credit report regularly. Having a copy of your credit report will show you what progress you have made in repairing your credit and what areas need further work. In addition, having a copy of your credit report will allow you to spot and report any suspicious activity.

An important tip to consider when working to repair your credit is to ideally keep your credit card utilization no more than 25 percent of the total credit limit. This is important because your credit card utilization is directly responsible for your credit rating. If your balance is high, aim to bring it down to no more than 70 percent.

On a yearly basis, review your credit report for items that could mean your identity has been stolen. If you see inquiries that you did not authorize, accounts opened that you do not recall, start taking action immediately to secure your identity and put a hold on your credit.

If you do not understand why you have bad credit, there might be errors on your report. Consult an expert who will be able to recognize these errors and officially correct your credit history. Make sure to take action as soon as you suspect an error on your report.

An important tip to consider when working to repair your credit is the fact that you most likely will never receive funding from a bank to start your own business if you have poor credit. This is important because for some there is no other option other than borrowing from a bank, and starting up a business may be a dream that is otherwise unattainable.

As you can see, credit repair is possible and you are now ready to take your first steps in getting the credit report that you deserve. Once you complete your credit repair journey you will be able to borrow the money you need, get a credit card, or buy a new car.

Is your credit a mess? It is possible to fix your credit. Credit repair is a process that anyone can go through. Read our helpful tips on how to fix your credit and get it to where you want it to be. You will see just how easy it is.

If you want to repair your credit, you must be motivated to turn things around! If you are lackadaisical in trying to repair your credit, you will never get anywhere. It is not impossible to turn around such a bad situation, but never lose your motivation to make it better or you could fail!

Make sure to fully read every single credit card statement that you get. You want to double check that all the charges are accurate, and that you are not paying for something you did not purchase. It is only your responsibility to make sure everything is correct and error free.

It is possible to add an explanation to your credit report to give additional information about the circumstances of any items that appear negative. Falling behind on a payment may have a very good reason. Adding the reason to your credit report makes it more accurate and may help you if you are applying for a loan.

If you have hurt your credit and have realized the damage you have done, it is important to start by actually paying what you owe. If you need pay your credit card bills, you need to find a job even if it is at McDonald’s. If you do not pay your card off, your credit will never get better.

Having many debts can be harmful to your credit score. One way to begin to repair your credit and reduce debt is to start with your smallest bill and add extra to the payments on that account. When it is paid in full, start working on the next smallest debt. The more accounts you pay off, the higher your credit score gets, and it looks great that you are working hard to pay off debt!

Don’t accumulate any new debts. This way you can focus on paying off debts that you already owe. When you acquire new debts, it can make paying off other ones harder. If you must use a credit card for a purchase, make sure to pay it off in full to avoid interest fees.

If you are behind on some bills, catch up as soon as you can. The longer that you pay your bills on time, the higher your credit score will be. Don’t beat yourself up if you are way behind right now, just budget your money so that you can have a time frame of when you will be caught up.

When repairing your credit, the first step is to find out what the top three credit bureaus are saying about you. These companies are Equifax, TransUnion and Experian. Finding your own credit report is free, so do not fall for a company looking to charge you to find out what they are saying, research it yourself!

When you review your credit report you will see items that are up to 7 years old. You can request that anything older than 2 years old be removed from your credit report. In some cases, the credit reporting agency will tell you what you need to do to have this information removed.

As you can see, credit repair is something that can be done. Anyone can work on fixing their credit report if they take the time to find out what needs to be done and do it. Our tips make your credit repair something that you can easily accomplish successfully.

There is no question that the need for a high credit score has become more important in the last couple of years as the economy has shifted dramatically. Not only that but the housing market and mortgage industry has changed right along with it. This means that keeping your credit score high is a vitally important if you have any plans to purchase a new home in the future or even buy a car. Many people are starting to wonder how to fix their credit score if it has been damaged by financial problems in the past.
In the recent past, it was easy enough to get a mortgage with a credit score in the upper 500s or low 600s. However, that is no longer the case as a higher credit score is typically required to get a mortgage loan. It pays to spend some time trying to repair your credit if there are any blemishes that might cause you problems getting your credit score higher.

The first step to fixing your credit score is paying down your credit cards. Although paying off your credit can help your scores, paying them down actually works better for the purposes of increasing your score. If you pay off all of your credit and have zero balances, eventually you won’t have a credit score because your score is based upon your payment history with credit cards. Depending upon which expert you listen to, you may start with the credit card that has the highest interest rate first or you might decide to pay off the card that is closest to being paid down.

Another important factor in fixing your credit score is using your credit cards very little. Creating huge balances can hurt your scores and keep you from paying off the balance each month. It is important to keep those balances down in order to increase your credit score.

If you have problems with your score, many experts will recommend that you get a credit card with a very low limit and charge a little bit each month. Then, immediately pay off your balance after charging. This will give you some credit history that looks good and can increase your score.

Another important part of fixing your credit score is requesting a copy of your credit report from the credit bureaus. There may actually be errors on your credit report that are causing your score to be low. You’d probably be surprised to know how many errors show up on people’s credit scores every year. If you’re looking to fix your credit score, it’s important to know whether your credit report is even correct or not.

There are so many variables that go into your credit score that pretty much everything you do in your financial life can affect it one way or another. With this in mind, let’s look at how some simple actions can raise or lower your score.

Here are some things that will damage your credit score:

1. Applying for a credit card. The simple act of applying for a credit card can hurt your credit if you apply too frequently. If you apply for several cards at once, it’ll do serious damage to your score.

✴ Spacing your applications out over time does less damage at once, but it lengthens the time it takes you to build up your total credit limit. Having high limits with low usage helps your score, but brand new cards can also lower it.

✴ Even though new cards can lower the score a bit, it still helps to build up your limits over a reasonable amount of time. The credit score boost you’ll receive once these cards show a wise record of usage is more than the temporary cut from when each card is new.

2. Using your credit card. Another factor in your credit score is your credit to limit ratio. This is essentially the fraction of how much credit you’ve used compared to how much you have. So the more you use your card, the closer you get to your limit and the lower the score.

✴ However, you have to use the card occasionally. You see, if you just let that credit card sit in your wallet untouched, the company that issued the card may cancel it due to lack of use.

✴ For a higher score, use your cards every so often, but keep your usage to less than 25% of the total amount of credit available to you.

3. Canceling your credit card. That’s right. Basically, once you have a credit card, you need to keep it. A lot of people make the mistake of thinking that closing unnecessary credit accounts will help their score. This is incorrect. In fact, it will lower your credit score as it lowers your total credit limit and affects your “credit age,” doing damage on two fronts.

It seems that regardless of which way you turn, you end up lowering your credit score, which just begs the question, “How am I supposed to get a high credit score when everything I do damages it?”

Fortunately, there are also specific actions you can take that will raise your score.

ACTIONS THAT RAISE YOUR CREDIT SCORE

The best way to raise your credit score is to pay off your current balances. This will widen the gap between your credit balance and your credit limit. While having cards clear of debt is nice, you’ll want to use your cards enough to keep them active.

Each month, charge something to your card and then pay it off before the payment due date. This will build excellent credit without you having to pay any interest charges. As time goes on, the fact that you kept those accounts open for as long as you did will lean in your favor when calculating your credit score.

While keeping your balance all on one card may be convenient for you, it’s actually better to spread the debt around to all of your cards. While the total will still be the same, this will reduce the balance on each card and that will work in your favor.

This also helps form a sort of “revolving door” of debt. If you set up the cards so that some are due early in the month and others are due around the middle, you can set up a system where there is always a balance on at least one card at any given moment. This will show creditors that you’re willing to use your cards without going overboard, thus boosting your credit score.

Lastly, check your credit report at least once each year and make any necessary corrections. This will keep you informed of what’s going into your credit reports and alert you to any suspicious activity.

Another strategy is to get your free report from a different bureau every 4 months. Alternating your reports in this way spaces it out to where you only request one from each bureau once each year, so they’re all free, but you keep up with more current information.

Your credit score can have a major impact on your life. Of course, this impact could be positive or negative, depending on your credit score. The higher your score, the more benefits it brings you.

MORTGAGE

One of the most notable impacts that your credit score will have is determining what kind of mortgage you can qualify for and even if you can get one at all.

If you have a poor credit score, you may get less than desirable terms or be denied for a mortgage altogether. Or they may tell you that they can get you financing if you come up with 50% of the cost of the house in cash.

A higher credit score will enable you to qualify for lower interest rates and a lower down payment. A lower interest rate not only saves you money on your monthly payment, but over the course of the loan, it can mean a difference of many thousands of dollars to you.

You may be thinking that you’ll just rent. While it’s true that renting an apartment doesn’t require a loan, they may run a credit check to make sure you’re able to pay the rent. A poor credit score may even keep you from getting an apartment, leaving you with little in the way of housing options.

LOANS

Mortgages are essentially huge loans, so if your credit score impacts your mortgage, it stands to reason that it would also affect other loans such as student loans, car loans, or smaller bank loans. Not having access to these sources of money because of a poor credit score can make your life much more difficult than it needs to be.

The higher your credit score, the better chance you have of securing a reasonable loan when you need one.

In addition, many of the great deals you see advertised only apply to those with good credit. For example, you may see an ad for a great deal on a car with no down payment. When you get to the car dealership to take advantage of their offer, you find out that it’s only available to those with a high credit score.

Whenever you see “w.a.c.” in small letters at the bottom of an ad, it means “with approved credit.”

The lower your credit score, the more you’ll have to pay for many items that you need or desire.

CREDIT CARDS

While you’ll continue to get “pre-approved” letters from credit card companies, the chances that they’ll grant you credit drastically reduces if you have poor credit.

Your credit score will also determine your interest rate and credit limit. So essentially, if you want to go out and buy high end stuff with your credit card, you’ll need good credit in order to get a suitable limit. They don’t just hand out limitless cards willy nilly!

JOBS

If you have poor credit, it may be more difficult to get a job if the employer does a credit check.

The reasoning behind this is that people with good credit are less stressed and more in control of their life. They may also be more able to focus on their job. A person with poor credit might also be more likely to steal from the company to pay their bills, so why take the risk?

As ridiculous as this may sound, it’s the reality of today’s job market. It does, however, provide motivation to keep your credit in good standing. With a down economy and companies laying off employees left and right, you never know when you may be looking for a job. Plus, moving up to a better job is easier with a high credit score.

CELL PHONES

Even cell phone companies look into your credit history when you make a purchase. Like every other organization, they want to know that you can pay your bills on time.

If you’re a fan of texting, tweeting, web surfing, or even old fashioned phone conversations, it’s in your best interest to keep your credit score on the high end.

Your credit score seeps into so many areas of your life that it only makes sense to keep it as high as possible. A higher credit score saves you all kinds of money, brings you opportunities not available to those with low credit scores, and makes your life a lot easier.