What steps can I take to improve my credit score?

The following steps may help to improve one’s credit profile:

• Know your current FICO® Credit Score and what appears on your credit report. The Balance Financial Fitness Program can help you locate this information as well as assist you with managing your credit. They will assist you with unbiased money management. Contact them by phone at 888-456-2227 or click on the link to their website.
• Check your credit report at least once a year, even better, once every 6 months, and correct any errors and inaccuracies that can damage your credit score.
• Maintain unused lines of credit if you can resist utilizing them. This will positively reflect on your ratio between debt and available credit.
• Try to keep your total account balance below 50% of your total available credit. For instance, if your cards have a total credit limit of $2000, keep your total balance under $1000.
• If your credit is severely damaged, or you have a very short credit history, apply for a gasoline credit card, a department store card, or a secured credit card. Use the cards, and pay the balances on time.
• If you fall behind on paying a bill because of illness, unemployment, or family issues, call your creditor to explain the circumstances and, if possible, work out a payment schedule you can meet.
• To minimize the number of inquiries on your credit report, don't apply for multiple credit cards over a short period of time, or for a card you're not likely to get.
• Continue to make payments on time. If forced to miss a payment, be sure to pay the following month. Accounts more than 60 days past due will be indicated on your credit report (Older late pays will become less significant with time).

What factors contribute to your credit score?

• Payment history (making payments on time.)
• Capacity (available credit.)
• How long the consumer has had credit (shows stability.)
• Accumulation of debt in the last 12-18 months (number of inquiries and opening dates.)
• The mix of credit. It is typically better to have more of your debt in installment loans such as a car loan or a mortgage rather than revolving loans (credit cards.)

What factors drive the credit score down?

• Missing payments, regardless of the dollar amounts. It can take up to 24 months to restore credit after even one late payment.
• Having credit cards at capacity (little or no available credit.)
• Closing credit cards lowers available capacity.
• Shopping for credit excessively.
• Opening up numerous trades in a short time period.
• Having more revolving loans in relation to installment loans.
• Borrowing from finance companies.
• Debt ratio.

How is time important in relation to the credit score?

• The simple passage of time can raise your credit score if you continue to make good financial decisions.
• Typically, activity and balances within the past 12 months have the highest impact on your credit score.

What actions can improve a credit score?

• Paying down balances on credit cards.
• Leaving credit cards open to maintain capacity.
• Continuing to make payments on time. Older payments become less significant with the passage of time.
• Refraining from opening new accounts.
• Acquiring a solid credit history with years of experience.
• Moving revolving debt to installment debt.

You may obtain a free copy from www.annualcreditreport.com.