“Why Your Credit Score Really Matters - In Ways You Might Not Know - And 6 Ways To Improve It”
July 24, 2008
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According to Yahoo, “Improving Your Credit Score” was a real mover and shaker for searches this week. No need to search, Ill give you some pointers right here…
Why Does It Matter?
Most of you know that a low credit score will hurt you on mortgage, car and credit card interest rates. But did you know that a low credit score can hurt you in other areas, too? Such as…
- Car and Home Insurance
- Getting a Job or a Promotion
- Utility Deposits
- Cell Phones
- Some Medical Procedures
- School Loans
- Your Marriage
6 Ways To Improve Your Credit Score:
1. Make Sure Its Right
Mistakes in your credit report will ruin your score. So, get copies of your Credit Report through Annual Credit Report.com (not free credit report.com) or by calling 877-322-8228 (it’s OK to give your Social Security Number because you called them).
For those of you who keep up with your Credit Report, Annual Credit Report.com is just fine. If not, I recommend myFico because it’s easier to read and you’ll be able to see all the info at once. It’s also the most like the one that will be sent to your creditors. Annual Credit Report.com gives you one report for each (lots and lots of pages.
You can dispute any errors by writing a letter to the credit reporting agency (you’ll have to do it for all three if the error is on all your reports). Tell them what’s not correct and send copies of any documentation you may have. Request that it be removed or corrected. Go to the post office and send it “return receipt requested” so someone has to sign for it. Keep copies of everything.
Next, let the creditor know that what’s incorrect because if they keep reporting the error, it won’t be removed from your credit report.
2. Know the Truth
Before you can improve your score, you have to know what it is!
You can get copies of your credit report at Annual Credit Report.com for free but you’ll have to pay for the credit scores.
I recommend getting your FICO score straight from the source…
If you get your score regularly and just want to make sure nothing creeps in, you can use two new free credit score website: Quizzle and Credit Karma. I tried both and was impressed with them.
3. Pay Your Bills (on time)
The best “secret” for having and keeping a great credit score is to pay your bills on time. And watch out because the credit card companies are getting sneaky - if your bill arrives after the specified due time (not just the date), it will be late, you will pay a late charge and it will affect your credit score. Mail it in plenty of time or pay online at the creditors’ website (check the fine print first). You might also want to set up automatic payments for at least the minimum payment so you’ll always pay on time even if you are out of town. You can always pay more separately.
Paying any bills late may affect all your other bills. This includes unpaid parking or speeding tickets, library fines, medical and utility bills. These creditors are reporting late and non-payments to the credit reporting agencies, too. I received a bill the other day from my daughter’s college town for a parking ticket shed thrown away; I made her pay it immediately before it hurt my credit score.
By the way, if you are on on-time payer and are late, call the creditor and ask them to reverse the late charge and not report it. Most will but you have to catch it promptly.
4. Don’t close old credit cards.
After you’ve paid it off, put the card in a safe place and keep the account open. The length of your history is an important part of the calculation. Another reason to keep it open is that your “utilization ratio” is another big part of the calculation. This means how much of your credit limits you’ve used up. The ideal is in the 30% range.
Weird, I know. Why would they give you a high credit limit and then not want you to use it? Statistics show that people who are bumping up against their credit lines have a higher chance of defaulting.
5. Don’t Go Crazy
Be cautious about applying for lots of credit in a short time frame. Lenders call this “excessive credit seeking” and it makes them think you’re desperate.
If you’re applying for home or auto loans, you have a 30 day window where multiple applications will only be counted once. You’ll want to shop around before actually applying.
6. Don’t Delay
Unfortunately, these steps will not fix your credit score overnight. It can take 3-9 months before you see improvements. However, I can pretty well guarantee you won’t see improvements if you do nothing.
The good news is that even if your score is really down in the dumps, you can improve it and the last 2 years count the most.
What Next?
I know that all of this can be overwhelming from ordering it to reviewing it to making the corrections. If you need help with your credit report, call me. I’m a Certified Credit Report Reviewer and I’ve reviewed hundreds of credit reports.
You’ll order your credit report and send it to me by mail or email. I’ll look it over and well have a 30 minute review to tell you exactly what you have to do. And… If you don’t want to write the letters, I’ll do that, too and send them to you by email so you can put in your private information, sign them and send them out. What could be easier?
You can call me directly at 541-387-2995 to find out more.
Warmly,
Cindy
Why Check Your Credit Report Regularly?
June 11, 2008
This is part of our Pay Debt Quickly series sponsored by PDQ Pay Debt Quickly kit.
Besides paying your bills regularly and on time, the single most important thing you can do to show that you are a good credit risk is to know what’s in your credit report.
Studies have shown that many credit files contain errors that can harm your credit rating, leading to rejections when you apply for loans, insurance or even a job. The errors range from simple human error to being mixed up with a similarly named person.
It’s essential that you check your credit files and monitor your credit regularly in order to protect your good credit standing, even if you always pay your bills on time.
And if your credit needs improvement, checking your report will help you find any problems that can be cleared up. A correct credit report, paying your bills on time and the passage of time will ensure the highest scores.
You can get a free copy of your credit report from each credit reporting agency at www.AnnualCreditReport.com. Try getting one at a time and you spread them throughout the year. At this site, you will have to pay for credit scores.
If you’d like to get them together (credit score and credit report) go right to the original source: MyFico.com to get all three.
You could get your free reports and then use My FICO free Credit Score Estimator to get a ballpark credit score (if you’re planning to get a loan or mortgage, you’ll want the real thing).
It is a good idea to check your credit report once or twice a year so you keep on top of any problems that might creep in.
Feel free to share your thoughts and questions about Credit Scores.
Have Cindy personally review your credit report. Order your Certified Credit Report Review.
Warmly, Cindy
