Improve your credit score

What does УCredit ScoreФ mean? A measure of credit risk calculated from a credit report using a standardized formula. Factors that can damage a credit score include late payments, absence of credit references, and unfavorable credit card use. Lenders may use a credit score to determine whether to provide a loan and what rate to charge.

Do you know what your credit score is? You wonТt know what you need to do to improve your credit score unless you first know what your credit score is. To find out, order a copy of your credit report. An amendment to the federal Fair Credit Reporting Act requires each of the major nationwide consumer reporting companies to provide you with a free copy of your credit reports, at your request, once every 12 months.

To order your free annual report from one or all the national consumer reporting companies, visit annualcreditreport.com , call toll-free 877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can print the form from ftc.gov/credit. Do not contact the three nationwide consumer reporting companies individually; they provide free annual credit reports only through annualcreditreport.com , 877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Under federal law, youТre also entitled to a free report if a company takes adverse action against you, such as denying your application for credit, insurance or employment, and you request your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company that supplied the information about you. YouТre also entitled to one free report a year if youТre unemployed and plan to look for a job within 60 days; youТre on welfare; or your report is inaccurate because of fraud. Otherwise, a consumer reporting company may charge you up to $9.50 for any other copies of your report.

To buy a copy of your report, contact:

Equifax: 800-685-1111; equifax.com

Experian: 888-EXPERIAN (888-397-3742); experian.com

TransUnion: 800-916-8800; transunion.com

For more information about credit card debt, identity theft, raising your credit score, obtaining credit cards, and more you can also go to creditcards.youngparentsmagazine.com

Under state law, consumers in Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, and Vermont already have free access to their credit reports.

If you ask, only the last four digits of your Social Security number will appear on your credit reports.

What can I do to improve my Credit Score?

Pay your bills on time. This is the big number one! ItТs always good to pay your bills on time and that keeps your credit score healthy. It is especially important that all of your recent bills have been paid on time if you intend to apply for new credit or a new loan. Recent late payments weigh against your credit score tremendously.

Don't close or open credit card accounts near loan time. A good rule of thumb is do not open any credit accounts near a time when you will be applying for a loan. It can lower your credit score, especially if you do not have a proven track record. What's more, a new account will lower the average age of your accounts, another factor in your FICO score. (FICO is an acronym for Fair Isaac Credit Organization) If you have several credit card accounts but are only using a few of them, you'll raise your balance-to-limit ratio if you close the unused ones.

Pay off debt rather than moving debt to other places. The ratio of your credit card balance versus your credit limit is the key, so, closing out an account and transferring the balance someplace else simply means you increase that ratio, which is more than likely to lower your score.

Example: You owe a total of $1000 on four credit cards, each of which has a $1,000 limit. Your total credit limit is $4,000, of which your total balance ($1,000) accounts for 25 percent. If you transfer all your balances to two cards and cancel the other two, your total credit limit is reduced to $2,000, and your $1,000 balance now accounts for 50 percent of that limit.

Reduce your credit card balances. A heavily weighed factor in your FICO score is how much money you owe on your credit cards relative to your total credit limit. Generally, it's good to keep your balances at or below 25 percent of your credit card limit, said Jeanne Kelly, founder of The Kelly Group in Brookfield, Conn., which helps clients improve their credit scores.

Examine your billing statements for errors. This is a commonly overlooked place to reduce debt. Companies do make mistakes. This includes examining all of your bills, not just your credit card bills. Jennifer Tarzian wrote more about this at youngparentsmagazine.com YouТd be surprised at how much money you recover due to correcting common billing mistakes.

Correct blatant mistakes in your credit report. Your credit score is only as good as what shows up in your credit report. Review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan. Changing a mistake on your report - such as a payment that is wrongly labeled as late -- can take 30 days to three months, sometimes longer. The way to obtain your credit score and report is listed above in this article.

Healthy credit is important in todayТs day and age. More information sharing between companies has been made easier due to new technology, so any blemishes on your credit will be known by all credit reporting agencies almost immediately. Keeping up with your credit score and taking steps to improve you credit score is essential, so take the time.

Credit Score Improves by Paying on Time

These days, everyone seems to be concerned about his or her credit score. Lenders and credit bureaus have made it clear that the credit score, whether the new VantageScore model or the FICO score model, is a vital part of determining whether or not to extend credit to a consumer. The score is a distillation of a number of factors that make up a consumer's credit history and it allows a lender to see, at a glance if the would-be borrower is worthy of the loan.

Not only will a high credit score make it more likely that a consumer will get a loan, but the score will also help determine whether that loan will be granted at a favorable interest rate. The best interest rates are given to those with the best scores, and those with lower scores will have to pay higher interest rates and fees. Because of this, many consumers are interested in knowing how to improve their scores, and there is not shortage of companies that are willing to provide advice on that topic for a fee.

But the one thing that every consumer can do to increase his or her credit score is easy to do and costs nothing - pay bills on time. It may seem both simple and obvious, but a history of paying bills on time is important to creditors. After all, the decision regarding whether or not to grant a loan is based in part upon whether or not the lender expects to be repaid. The more likely the consumer is to repay, the less likely he or she will be to default.

How a consumer has historically paid bills makes up 35% of the credit score. More than one third of the score is devoted to whether the bills were paid on time or paid at all. No other component makes up as large a portion of the score, and for good reason - lenders want to be repaid! That said, the easiest and cheapest way to start improving a credit score is to make a concerted effort to pay bills on time. It is better to make even a minimum payment on time than it is to pay late and in full. With online bill paying becoming more and more common, it is not possible to schedule bills to be paid automatically, which can be of tremendous benefit to those consumers who aren't too organized and sometimes just forget to pay.

This is one of those cases where the most effective solution also happens to be the cheapest, and this solution is free. If you want to see your credit score increase, make sure that your bills are paid on time.

5 Easy and Quick Ways to Improve your Credit Score

Your Credit Score is one of your biggest financial assets. If your credit score is high, your borrowing rates will be low and therefore save you hundreds of dollars. The big mystery is how to maintain a high credit score. Well if you want to either maintain or repair your credit score, you are in luck, it can take as little as two months to raise your credit rating.

Your credit score is based on a few prime factors, there is no particular order in which I will discuss them (Some of them have higher weights in regards to the score). Repayment history, current debt owed, recent credit checks, and registered income (there are other factors as well). In order to repair or raise your score you may follow a few of the steps provided below.

1.)    Pay off all revolving credit cards. Revolving credit cards are like Discover card or any other monthly credit cards. Even though you might pay before the deadline, credit card companies report the debt owed on a monthly basis which may be before the deadline. On your credit score it will not show as bad debt, but it will decrease your overall score. The standard recommendations are as follows. If you have one credit card, pay it off before the months end. Second, if you have two credit cards, pay the minimum on both of them and work on paying in full one of them first.
2.)    Registered Income. This is your official salary from work. Basically the numbers they crunch are matched with what you earn. If you debt is larger than what you earn, your credit score is lowered. So, if you are an independent contractor or your income is just a little too low get a part time job. This will rise your potential earnings and increase your ability to repay your debt and therefore increase your credit score.
3.)    Check your credit score online with one of the official companies to see what or why your credit score is the level it is. This will help you determine what you can really do to increase your credit score.
4.)    Do not apply for every car, credit card, and home that you are looking at as an eager consumer. Because every time you try to purchase a home, car, or get a new credit card your credit score is checked and the crediting agencies lower your score if you have had two or three credit checks withing a few months of each other.
5.)    Lastly, open a savings account and budget your money accordingly that you will always have extra cash to help in times of need.

Protect your credit score because it can mean everything when buying a home or trying to get some capital for whatever purpose you need it for. It is not hard to raise your credit score, it is hard to maintain it. If you can purchase a credit score monitoring service, it will protect you from fraud and help inform you of ways to increase your credit score when needed.