How to Improve Your Credit Score

Posted on September 30, 2012 by

Improving Your Credit Score

Your credit history and credit score can be vital when applying for a mortgage, revolving credit, landing a new job or applying for auto insurance. A credit score is a number assigned to each individual reflecting their credit worthiness and ability to manage money and credit. Higher credit scores may qualify you for a variety of loans and better interest rates, which saves money. If you are looking for credit cards canada online, it’s prudent to learn how to manage your credit report while improving your credit score.

Monitoring Your Credit Report

The three main credit-reporting agencies include TransUnion, Equifax and Experian. Each reporting agency maintains your credit report and credit score rating. Credit reports and credit scores can vary between agencies because creditors and utilities may report your credit history to one agency or all agencies.

Because your credit score, (FICO score) is derived from a combination of information on your credit report, it is important that you check your credit reports at all three agencies yearly. Look for discrepancies or inaccurate information, which directly effects your FICO score and report them to the credit bureau.

How Credit Changes Your Credit Score

In order to receive good credit offers and loan approvals, individuals seek to maintain the highest FICO score possible. As a young teenager, you most likely have little or no established credit history. To build a positive credit history, you should open a few credit card accounts and possibly a car loan.

Take care to make timely payments to increase your FICO score. Missing or not paying the full amount on a loan payment or credit card bill reflects negatively on your credit report and lowers your FICO score.

Improving Your Credit Score

Individuals may request free credit reports from each bureau yearly, but must pay a small amount to receive their credit score. Review your reports to determine how many creditors are reporting to the main credit bureaus. If your credit reports only show one or two companies reporting to the bureau, consider opening a couple more credit accounts to build a higher credit score.

Make all your rent, mortgage, charge cards, loans and utility payments on time. Paying all your bills by the due date over times strengthens your credit report and increases FICO scores. Monitor your credit card balances carefully. Keeping your charge card balances at least 30% below your available credit limit helps to ensure credit worthiness. Allowing balances to creep over this limit lowers credit scores with a negative effect.

Both men and women should refrain from applying for new credit too often in a six-month period. If you are turned down after applying for a loan or credit card, it may have a negative impact on your credit score.

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