Yielding Wealth | Personal Finance

Give Your Credit Score a Boost

by miranda on August 30th, 2007

You probably already know that your credit score is important. You know that several factors go into your FICO score, and you know that many people who look at your credit score. And, of course, your credit score is a big deal when it comes to getting a home mortgage. So you need to know what you can do to keep it in good shape. Here are 7 things you can do to give your credit score a boost:

1. Pay your bills on time and in full. This is a biggie. Missed payments, or payments that come in below the minimum show you as irresponsible and unreliable. Give yourself plenty of time to make payments, and pay the minimum. If you are having troubled, contact your creditor before things get too desperate and make arrangements. As long as you try, and as long as you get things back together, most creditors will delay reporting your to the credit bureaus.
2. Keep maintained bank accounts. Checking and savings accounts show stability and responsibility.
3. Maintain long-standing accounts. I have a credit card that doesn’t do me much good. It has no rewards program. But it is the oldest credit card I’ve got. Every now and then I buy a pizza or a pair of shoes on it. Then pay off the balance. This credit card establishes that I have a long credit history. This is a good thing.
4. Use your name consistently on credit applications. Pick a version of your name and stick with it. Just altering the middle initial can make it look like you are attempting to get more credit under other names. This can be rough for women, but if you change your name upon marriage, use one version of that name. This will show only one alias for you, and it’s a pretty obvious one.
5. Try to focus on “good” credit. “Good” credit includes things like reasonable auto loans, home loans and major bank credit cards used judiciously. Retail store credit cards and finance company loans are not considered “good.” That payday loan or that Xpress card will damage your rate more than a personal loan from a major bank or a Visa card.
6. Get rid of “pre-screened” offers. Preferably by shredding them. These offers come to you, but don’t affect your credit score until you fill out and send in the application. The more inquiries into your credit, the lower your score. You can get a good credit score boost by not applying for credit for at least six months.
7. Fix mistakes on your credit report. Check your credit report regularly for discrepencies and mistakes. My credit report was showing duplicate accounts, as if I had two credit cards with one company. I disputed and had the extra account removed from my report. My credit score went up by 8 points immediately. Make sure you fix any mistakes you find on your credit report.

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POSTED IN: Credit, Personal Finance