Credit Score -
Five Simple Steps to Protect
And Improve Your Credit
Score
Look Who's Checking Your Credit
Score
wonder how creditors determine whether they
are going you extend you credit? For years, lenders have been
using credit scoring systems to determine if you would be a
good risk for mortgages, auto loans and credit
cards. These days, more and more types of businesses,
including employers, cell phone companies and insurance
companies, are using credit scores to decide whether to approve
you for a loan or service and on what terms.
As amazing as it may sound, homeowners and auto insurance
companies are using credit scores to help decide if you’d be a
good risk for insurance. A good credit
score means you are likely less of a risk,
and in turn, means you will be more likely to get credit or
insurance or that job. Here are five steps you can take to
improve and correct your credit score.
What is a Credit Score?
A credit score is a somewhat of a complex mathematical
calculation that assess many types of information in your
credit file and then rates you based on the results. Lenders,
insurers and employers use your credit score to help determine
whether you qualify for a particular job, mortgage, auto loan,
insurance, credit card, service or other loan. Since this
credit scoring system has been in place, there have been
countless horror stories of people who had improper information
on their credit reports. Others found out that they were
victims of identity theft and/or credit card fraud. There is a
number of ways your score can turn out less than what it should
be. Here are some steps you can take to improve your score.
1). The First Step To Improve Your Credit Score Is
To Evaluate Your Credit Reports
In order to evaluate your credit reports, you must obtain
copies of your reports from the three primary credit bureaus:
Equifax, Experian and TransUnion. You can obtain your credit
reports a number of ways. You are entitled to a free credit
report if an entity denies you credit, a job or insurance.
In some states, by law, you are eligible for a free credit
report from the three credit bureaus on an annual basis. You
can contact each bureau directly or go through the Annual
Credit Report Request Service. You can also purchase your
credit reports and credit scores directly from each credit
bureau. Once you obtain them, make sure the information is
correct.
2). Know The Factors They Use To Determine Your
Credit Score
Although the credit scoring companies and credit bureaus don’t
divulge the exact methods they use to compute scores, we do
have these basic guidelines to go by. Do you have a credit
history? How long is your credit history? Have you recently
applied for new credit? What is your debt to income ratio? What
types of credit accounts do you have and how many? Have you
filed bankruptcy? Do you pay your bills on time? Do you have
late pays, non-pays or any write offs? Do you have any liens or
judgments? By having somewhat of an understanding on how they
tally your score, you can avoid making mistakes that would
negatively affect your rating.
3). Do Everything In Your Power To Pay Your
Obligations On Time
One way to easily improve your credit score is to always pay
your bills on time. Many businesses have set it up so that you
access their automatic payment system. On the date that you
set, they automatically deduct the payment from your bank
account.
4). Learn The Steps To Correct Errors On Your Credit
Report
Each credit bureau has a procedure in place to help consumers
dispute and correct issues on their files. Learn them and be
ready to take action to remove errors and outdated
information.
5). Don’t Over-Extend Yourself
One of the fastest ways to lower your credit score is to bite
off more credit than you can afford to pay back. People do this
for numerous reasons. They use credit
cards to start a business and it doesn’t pan out. The next
thing they know, they’re wallowing in an ocean of debt that
won’t go away. The best advice any financial advisor can give
you is to live below your means.
Joel Marks has been helping people get out
of debt and avoid both bankruptcy and foreclosure for over
fifteen years. Utilizing savvy debt counseling, debt management
programs, Federal laws and a team of attorneys, debt
counselors and advisors, he has quietly assisted thousands come
from under the heavy burden debt.
For more information on this topic or any other issue
related to getting out of debt, living debt free, debt
management, debt relief, the Fair
Debt Collection Practices Act and stopping debt collectors in
their tracks, please visit www.DebtErasure.com
Source: http://debterasure.com/
| 
