Do you have a lower credit score than you want? If your score is lower than 720, there are many simple things you can do to raise the number – and they require minimal effort. Simply put, good credit allows you to take out reasonable Denver home loans without strings attached.
To get started, you must first determine your current credit score. This is easily accomplished by visiting the website http://www.freescoreonline.com. If you enter your personal information and answer a few basic questions, you will be provided with your credit score free of charge.
Where does your score fall within this credit score chart?
- Excellent -720-850
- Good – 680-719
- Average – 620-679
- Poor – 580-619
- Bad 500-579
- Really Bad – Below 500
If your number falls into the 720-850 range, that’s great! If it’s anything less than 720, there is room for improvement. Why is improving your credit score so important? Simply put, the higher your credit score, the more credit you will be given by credit card companies, mortgage lenders, and other financial institutions. Also, credit with the best possible terms and interest rates is offered to the people with the highest credit scores.
Following are 10 simple tips for fixing or improving your credit score:
1) Get a copy of your credit report from a free credit report site such as www.freecreditreport.com. Review the report and make sure there are no errors. If there are any errors, even small ones, make sure to report the problems to TransUnion, Equifax and Experian (the 3 major credit reporting agencies) and request that they be fixed.
2) Always make your monthly payments on time. If you know that you will be out of town when one or more of your bills are due, pay them early. If at all possible, set up automatic payments that can be deducted from your bank account. Responsibly paying your Denver home loan rates will reflect highly on your credit score.
3) Work diligently to reduce your debt level. Put yourself on a payment plan with the goal of getting balances paid in full. It’s always smart to start with the credit accounts that have the highest interest rates.
4) Be aware that if one of your credit accounts goes to collections, the information will remain on your credit report even if you negotiate a settlement. Collections accounts show up on credit reports for seven years.
5) Don’t let revolving credit accounts sit dormant for too long. It helps build your credit score when you charge items to your revolving accounts and then pay the total amounts due each month.
6) Keep the number of credit accounts you have to a reasonable number. Having too many accounts increases your available credit limit but can actually hurt your credit score.
7) Check your credit report regularly and be aware of all your unpaid balances.
8) Don’t open too many credit accounts in a short period of time.
9) Keep at least some of your credit card accounts open at all times. Many people trying to manage their credit card debt get rid of all their cards as a mechanism for curbing spending. But a person who has one or two credit cards and has used them responsibly will have a higher credit score than a person with no credit cards at all.
10) Instead of moving credit card balances from one account to another, simply pay off the debt. If it’s impossible to pay it off, focus on paying down the balances as diligently as possible.