Four factors you need to understand and control to change your Credit Score

Your credit score is a snapshot of the content of your credit report when calculating points. If your score is high (above 900), then you will get some congratulations. Read your desire for some useful tips to further improve your score. If your score is considered as low, you should immediately read this article and start implementing useful tips.

Your credit score is the conversion of your credit report to a 3-digit score that allows lenders to quickly and more objectively evaluate your application. Most people do not realize that getting credit scores from all three reporting bodies (TransUnion, Equifax, etc.) is free to pay for one of these services, even though they have the right to receive a Credit report free of charge. The credit rating is one of the few factors that the lender uses when deciding whether to use credit, insurance or financial services. Understanding the content of your credit report and your credit score is very important, even if you are purchasing a large purchase to buy a loan (or a loan) or if you are just changing auto insurance companies.

In addition to your credit rating, other factors that are taken into account by lenders are: the length of employment, income and previous experience with a client. Depending on what they are applying for, some lenders will consider various factors different, they will apply more weight than each other.

In theory, if you have a high score, lenders can conclude that you can repay your debts. This allows lenders to offer you the most appropriate credit terms, including interest rates. If you can understand the factors that determine your credit score, you should be able to improve your weakest points and increase your total score.

factors

one) The amount paid to an open real estate account is too low – If it is close to the value of the remaining property in your home or auto loan, it can be considered as a negative factor when determining credibility. Lenders will look more favorably to a customer paying a large down payment for a home or auto.

2nd) Existing credits in open revolving credit accounts are too low – The availability of the credit is a sign that you can manage your financing responsibly. Lenders, like customers with a large amount of credit.

3) Balances in your open accounts are too high compared to credit limits – It's a good idea to use your accounts regularly, but don't forget to keep your balance low compared to your existing credit limits. 2 – 3 If you have a Visa, Mastercard and / or American Express card and you carry a large balance on these credit cards, you can borrow too much and live above their average. The ratio of this high balance rate to the credit limits in open accounts indicates that you don't have a lot of credit. Getting more credits can be seen as negative by lenders.

4) The average loan amount in open real estate accounts is too low – Giving the credit to you is a sign that you can manage your financing responsibly. Lenders want to see that consumers use high amounts of credit for themselves.

Increase your credit score

Regardless of whether your score is high or low, there may be a lot of discussion and interpretation when you receive your credit report and score. You should read the report thoroughly and determine which opportunities you can use immediately to improve your score. Most of the easy fixes (I'm calling it "low hanging fruit") can discuss and fix errors or close several old retail accounts that you haven't used in a while and don't want to use anymore. Consumer reporting agencies should correct or delete incorrect, incomplete or unverifiable information.

For example, if you opened an account with Target 6 years ago to save 10% on a large purchase, you haven't used it since you purchased the card a long time ago and you have other older active accounts. , would be a good idea to close the account. In your report, you can also discover errors such as an unpaid and delayed balance in an account with a doctor or a local reseller. If there is an error that affects your score negatively, you have the right to object to the error. If you believe that your debt is paid in full and / or at least in full and / or at least fully, you should approach the person / company reporting the problem with your account. You can ask a problem to remove documents from your account.

Since your credit score is an image of your credit report when it is calculated, long-term responsible credit behavior is the most effective way to improve future scores. Below are the best ways to increase your score.

a) Pay bills on time – invoices, credit cards, mortgages and auto loans are invoices to be paid. However, timely payment of medical bills and insurance affects your credit score.

b) Lower balances on rotary credit cards – This helps factors 2 and 3 above. Increases your existing credit on this card.

c) Use credit wisely – Timely bill payment and low balances is the first step. Of course, if you are not looking for better terms to close balances on your high interest credit / credit card, limit your application for additional credit. If you apply for a new card to swap balances with lower interest cards, it may seem like you are making money, but it may be seen as negative by the consumer reporting organizations.

D) Review your credit report regularly to make sure it is correct

If you are a species who has no idea that your turbulent credit history has left you in the lender's eyes, don't worry, it's easy to ask for and review your credit report. Getting a credit score with your report costs a little money. However, this is an exercise worth your time and the minimum cost. If you're on the market for a new home or car, you'll likely be looking for a new loan. If you can safely walk to an open house or to a new car dealer, knowing that you will not have trouble borrowing to complete the purchase, then you will probably be able to choose your home or car. Are you in the price range?