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Credit Repair Advice: Improve your Credit Score
When your credit is bad, it can feel hopeless. But, you can improve
your credit score if you take the right steps.
Credit Repair Advice: How to Improve Your Credit Score
Our credit scores determine much about how we live our lives. We buy
practically everything on credit. When applying for a loan, our good
credit scores help us receive reasonable interest rates. In fact, from
landlords, to insurance companies, to utilities, everyone looks at our
credit scores, as they are a reflection of our financial health. A
healthy credit score may determine what various agencies will charge for
their services. Today, even employers check personal credit scores
before offering a job.
Knowing more about our credit scores and the factors affecting them may
help us build a positive credit history. But first, let’s look at how
they are maintained by the various credit reporting agencies.
Three major credit bureaus - Equifax, Experian, and TransUnion -
calculate credit scores. Though they use the same methods and formula to
calculate scores, they sometimes come up with a different rating for
various reasons. One agency may have more updated information about an
individual. A creditor may have shared information with one agency only,
but not with the others. Creditors, while checking on our scores, take
the average of the three scores from these three agencies.
Credit scores range between 300 and 850. A score of 680 and above is
excellent for obtaining mortgage financing at low interest rates. A
credit score of 621 to 679 is an average score and you would have to pay
a slightly higher rate of interest. A credit score of below 600 makes us
potentially unreliable and harder to obtain credit. When a credit score
falls below 600, credit repair steps should be taken immediately.
The following are factors affecting credit scores and basic steps to
take to maintain an accurate credit score rating with the credit
1. Routinely check payment history and the current credit debt held.
2. Credit history length is a determining score factor. Naturally, the
longer a ‘good’ credit history, the better.
3. Do not close old or paid off accounts. These show the credit history
length and contribute to higher credit scores.
4. Pay off debts to improve credit scores.
5. On-time payments. Delayed payments appear on credit reports and
adversely affect it.
6. An individual’s race, sex, age, level of education, or marital status
has no bearing on a credit score, nor does the fact that an application
for credit was previously turned down.
Taking care to maintain a high credit rating enables us to receive
credit and loans at good rates. Our credit score is a reflection of how
we manage our finances and a determining factor for many aspects of our
lives. Knowing early on how to have a healthy credit history is the best
way to avoid bad credit and limited loan options in the future.
Sherry Frewerd publishes 'How to Consolidate Credit Debt'
http://howtoconsolidatecreditdebt.com where you can find free
information to help you repair and improve your credit history and
reduce credit debt.
Recommended Frugal Reading
Living On A Dime is known as one of the very best resources of its kind to help you get out of debt without depriving yourself.