When it comes time to purchase a home or take out a big loan, your credit can either be a huge benefit to you or it can be something that holds you back. That distinction will come as a result of some of the decisions you have made in the past. Here are a few very important things that will determine how strong your credit rate score is.
1. How often do you apply for credit?
Some people donâ€™t realize that when they apply for lots of credit cards, they are actually hurting their credit rate score. Lenders like stability, and if people have been applying for lots of credit cards or small personal loans, it can end up hurting them worse than they realize. Even if you are being approved for these cards, your credit rate score could still take a hit as a result.
2. Make sure your information is correct on your Credit Rate Score
One of the biggest mistakes that people make when they have a low credit beacon score is that they donâ€™t double check the information at credit bureaus. All too often, your credit rate score can be hampered because the folks at the three major reporting bureaus donâ€™t have your correct employment or home information. These things are very important and will affect your FICO score, so keeping them in mind is a must.
3. Do you have open accounts?
Maybe there is an old credit card that you havenâ€™t used since 2005. You might have thought you closed it down, but in reality, it is just sitting there on your credit report. It is important to keep all of your accounts in mind, even those that you donâ€™t use any more. Having too many open accounts can negatively impact your credit rate score, so closing them down is something that could give you a boost.
4. Donâ€™t let them mess your credit up!
By them, I mean the credit reporting bureaus. With so much information out there, mistakes are sometimes made. Make sure that they have the correct information, because if there is an error on your credit report, it could really be putting your credit rate score down. If you dispute these errors, then your chances of getting that loan will increase significantly.
My FICO score has be hurt by mistakes that had nothing to do with my credit history; in it is estimated that more than half of all credit reporting scores contain incorrect items.
5. Donâ€™t be afraid to keep a watchful eye on your Credit Rate Score
Monitoring your credit report every couple of months is a great idea. By doing this, you will be making sure that nothing unauthorized is happening under your name. In addition, you will have a good idea of what you need to do in order to raise your credit rate score for the future. Overall, it is just a good policy to closely police your credit score rating.
6. Pay your bills on time
It should be obvious, but some people might underestimate the effect of late payments. Simply put, when you neglect to pay your bills on time, that is going to be a strike against your credit. Each time this happens, your report looks a little bit worse and your credit rate score takes a hit.
7. Reduce the level of your debt
Having too much debt can kill your credit rate score. If you donâ€™t have a big income and you have a lot of revolving debt, then lenders are not going to want to extend you any sort of loan. This is especially true of consumer debt, which is a known credit rate score killer.
Where you work and how much money you make is something that can have a profound impact on your credit rate score. Make sure that each of the reporting agencies has this information on file. The better your job, the better your score is likely to be, although this isnâ€™t always the case.
9. Major marks against your credit
Some things are more difficult to recover from than others. Things like a collection, bankruptcy, or foreclosure will take a long time to recover from. These are difficult situations that happen to many successful people, but you should keep an eye on your credit rate score while you are going through the difficulty.
10. Missed payments
Of all of the little things that you can do to ding your credit rate score, missing a payment is right up there among the worst. Never, under any circumstances, let an entire period of time go by without making a payment on the account. Even if you donâ€™t have the money to make a full payment, your credit rate score will benefit from paying something to your lender instead of missing the payment.