5 Tips for Improving Credit Scores

From lower loan rates to higher employment opportunities, a good credit score can translate into greater savings and more career opportunities. One of my top goals is to improve my credit score. Even insurance companies are using credit scores to determine rates. Therefore, I'm collecting data and insights about how to improve credit scores.

CCCS offers these tips for raising credit score:

"1. Pay your bills on time, at least five days before the due date. Being late one month and current the next won't help your credit score; you have to always pay by the due date. Be aware that paying off a collection account, or closing an account on which you previously missed a payment, will not remove it from your credit report.

2. Whenever possible, pay your balance due at the end of each month. If you do carry a balance, try to keep the difference between your credit limit and your balance below 50%. For example, if you have a credit limit of $1000, keep your balance at $500 or below.

3. Pay the most that you can on your debt instead of transferring balances from one credit card to another. You may have heard "do not close credit cards" or "close the credit cards that you are not using." Both actions could raise or lower a credit score depending on your personal situation.

4. Check your credit report regularly to ensure that there are no items that are not yours. You can also spot if there are errors or if someone is trying to use your information to get credit, which may be an indicator that you are the victim of ID theft. You are entitled to one FREE copy of your credit report each year from each of the three bureaus. Visit www.annualcreditreport.com for details.

5. Apply for and use credit only as you need it. Don't apply for cards you don't need as a way to increase your score. If you have only been managing credit for a short period of time, do not open too many accounts quickly.

"Raising your score by just a few points can save you hundreds, or even thousands of dollars over the life of a loan. said Jessica Cecere, president of Consumer Credit Counseling Service (CCCS) of Palm Beach County and the Treasure Coast."

source: CCCS
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Kiplinger Answers My Reader's Query: Bad Credit RX?

The folks at Kiplinger’s Personal Finance have provided an answer to a reader's recent question about credit-card repair, which followed a recent post on this site.

Here's the question:

In response to Kiplinger's formula for a healthy credit score, Anon wrote:

That's very nice, but sometimes people get sick and can't work and lose their income and their credit goes in the tank. How do you get your credit out of the tank?

Kim Lankford, Contributing Editor, Kiplinger’s Personal Finance magazine provided this response:

"You can't erase a bad credit history, but you can take steps to improve your credit record from this point on. Negative items generally affect your score for up to seven years, but as time goes by their impact lessens.

Continue using your cards, but clean up your act. Pay your bills on time, keep your account balances low, and be sparing in opening new accounts. As long you use credit conservatively, your score can rebound surprisingly quickly, says Craig Watts of Fair Isaac. We've seen cases of bankruptcy in which borrowers have qualified for a premium mortgage in three years.'"

Here's a link to an article Kim wrote for the November issue profiling individuals who took control of their credit problems:

Special Thanks to Kim Lankford for the prompt response.


Special Thanks to Laura Stevens from the The Rosen Group for making it happen so quickly and efficiently.


And, of course, kudos to Anonymous for asking the question.
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Kiplinger's Three Rules for Great Credit Scores

This guest post is from Kiplinger's:

"The December issue of Kiplinger’s Personal Finance offers three simple rules to improve your score:

1. Pay bills on time. Your payment history makes up more than one-third of your score.

2. Keep the balance on your credit cards below 25% of your available credit. In FICO’s model, your actual credit limit isn’t as important as your credit utilization ratio—the percentage of your limit that you’ve actually used.

3. Limit applications for new credit. Each time you apply for new credit—especially if you have a short credit history or few accounts—an inquiry is made on your credit report. Inquiries themselves are tiny dings—but a lot of dings can add up to a big dent.


The article in its entirety is available at http://www.kiplinger.com/magazine/archives/2007/12/perfect-credit-score.html."

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