7 Ways to Improve Your Credit Score
The mortgage meltdown that we are experiencing at this time makes it all the more important for anyone thinking about purchasing a home to make sure he or she does everything possible to improve his or her credit score. Here are seven things that you can do to increase your FICO score.
- Pay Off As Much Debt As You Can - This is the best and quickest way to improve your credit score.
- Pay Your Bills On Time - It may sound like a simple thing, but few things will adversely effect your credit score like having late payments.
- If You Are Behind On Payments, Catch Up - Do everything you can to get current on all payments to your creditors and stay current. The longer you keep paying your bills on time, the better your score will be.
- Having Trouble Paying Bills? Get Help - If you find that you just can’t keep up with all your bills, contact your creditors and see if you can make arrangements or contact a credit counselor.
- Do Not Open Any New Credit Accounts - Having the ability to borrow money doesn’t effect your score, but owing a lot does. Don’t tempt yourself. Open new accounts only when absolutely necessary.
- Do Not Close Old, Paid Off Accounts - Closing those accounts lowers the total credit available to you and makes the balances you do have loom larger in credit score calculations. Also closing older accounts can shorten the length of your reported credit history and make you seem less credit-worthy.
- Keep Track of Your Credit Score - You are allowed to get a free look at your credit report with all three credit bureaus (Experian, Equifax and TransUnion) once a year. Any one of the three credit bureaus will calculate your FICO score for a nominal fee. Should you find any errors, follow the credit bureau’s instructions on how to get the problem corrected as soon as possible.
These seven tips can help you increase your FICO score (remember 850 is the best and 300 is the worse), and improve your chances of getting a loan with the lowest possible interest rate. Happy House Hunting!
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