Raising Your Credit Score. Articles | Personal Finance

By: Guy Starbuck

Every time you need to get a loan, apply for credit; get a mortgage, or anything else that deals with money borrowing, companies want to pull a credit report. Even applying for jobs occasionally takes having your credit pulled to even be considered. Insurance companies use credit reports occasionally to decide to cover you or not and what type of rate to give you. Right or wrong, companies want to use our credit scores for everything.

Many consumers do not even know or realize just how often their credit report is pulled and that each time that happens it is a hit on their file, which also brings down their credit score. Because of this it has been advertised more and more to check your credit report periodically to make sure all information is correct and accurate. Staying on top of your credit file will be the first step in achieving a higher credit score. Especially check prior to a major purchase or loan application, as you do not want to get there and be caught off guard by something you had no idea about.

There are a few ways to raise your credit score; one was already mentioned above to periodically check your report accuracy. Make sure your name, address, previous addresses, phone number, years at address, and employment history is correct. This information is wrong about 50% of the time. Correcting these items to make sure they match on all three reports will add confidence to lenders. Also, making sure that accounts that are closed, show as closed. Or that the bank names and the accounts that are showing are actually yours. Information does get misplaced and put onto incorrect files. Correcting these issues will definitely raise your score also.

Another step is not to apply for tons of credit all over the place. Be selective when applying. Each time a credit report is pulled in your name that is a hit and lowers your credit score. Also, each time it is pulled and you are denied that does not look and can lower the score. Picking carefully who you allow to pull your credit, will ensure your name, number, address, and social are not floating all around either.

Lastly, do not close cards that are paid off. This will lower your score because of the debt to income ratio that they calculate. Only using 50% or less of your available balance on a card looks best or 50% of the total available credit. Trying to keep these numbers correct is difficult, but it is part of how your score is calculated.

Remember, you cash instead of credit whenever possible, try to never max out your credit accounts, make payments on time, and try to make more than the minimum payment to pay off the debt faster. Consistently doing these tasks will save you money and time. Your credit score will look better and you will get better rates and loan offers.

Furthermore, as mentioned above make the credit bureaus correct inaccurate or wrong information. This is their job and they are required by law to investigate and fix incorrect information. Stay on top of it with them and do not allow them to get out off doing what they are required to do. Mistakes, misinformation, and wrong accounts all lower your credit score, making your life harder. Writing to the agencies and/or filling out their online forms must be done to have the changes made. It will take some and a lot of effort, but it is well worth it. Your score will improve and your financial life will improve also.