Maybe you have realized how much a low credit
score impedes you financially. This is why it is so important that you
are focused on improving your credit score.
Have you applied for a loan and
couldn’t get it for that new house? Or maybe you needed a
certain percentage on a loan, and couldn’t get it? Hopefully,
this information helps you in improving your credit score.
First off, you will want to get a credit
report from each of the three major credit reporting agencies. It is
essential to get a report from each of the agencies (Experian, Equifax,
and TransUnion) because they the information may differ. By law you are
entitled to a free copy from each agency every year.
Once you have your reports in hand, examine
the information to make sure that it is all correct. If there is
something wrong, which in most cases there is, you will want to report
that you the agencies. Don’t just check your credit account
information, but also your personal information.
Your credit score is calculated by weight.
Here is the list and their percentages:
* Payment history – 35%
* Amount owed – 30%
* Credit history length – 15%
* New credit – 10%
* Types of credit used – 10%
As you have probably noticed, the best way
of improving credit score is by improving your
payment history. This is
a huge percentage of your credit score. This sum takes into factor all
of the types of payments that you have, such as mortgages, credit
cards, department store cards, car loans, etc.
All of these weighted sections also include
important details like missed or late payments. It’s
important not to have late payments because they can dock your score
anywhere between 50-100 points.
One great secret that you probably
don’t know about is checking your credit report to see what
day your creditors send updates to the credit bureaus on your payments.
It is often true that they are not inline with your payment due date.
To get around having a balance due on your report, pay your payment
before the date on your report, not on your bill.
If for some reason you think you
won’t be able to make a payment, or the whole sum, contact
your lender and see what you can work out. Show that you are
responsible by having your payments auto-debited.
Improving your credit score will take time
and effort. Don’t get caught in a trap by offers swearing to
help you restore or repair your credit quickly. Just do things the
simple and long way.