| By :
Jamie Simpson
Generally a credit report is a record of an individual or companies past borrowing and repaying habits which also includes late payments and bankruptcies. The information in most credit reports is used to identify you: your social security number, date of birth, employment information and other factors, reports differ from agency to agency. Credit is important if you want to buy a car or house, start your own business or rent an apartment. Without a good credit history you may have to pay a higher deposit on an account or higher interest rates. Of course, there is a chance that you won't be offered any credit at all. 7 Helpful tips 1. Review your credit report and correct any errors. This will save your score dramatically. 2. Check your balance and reduce your balance on your credit accounts up to 75%. 3. Pay your bills on time this is the most effective way to increase your score. 4. Open new accounts and re-establish credit on an as needed basis. 5. Keep old credit accounts even if you don't use them anymore. 6. Don't let anyone make an inquiry unless you absolutely have to. 7. If you are applying for a loan don't open new credit lines this will lower your score. Score breakdown 35% payment history lenders want to find out how you pay your bills on time. This score is determined by how many accounts you have opened and if any payments have been late, sent to collection or bankruptcy. 30% outstanding debt this section is calculated by how much you owe on your current loans, how many credit cards do you have and have they all reached the limit? The more maxed out cards you have the lower your credit score. Keep balances down by 25-75% of the limit. 15% length of time you've had credit. The longer you've had credit opened the higher your FICO score will be. This is a way for lenders can look at your past and determine how you would respond in the future. 10% new credit keep in mind that when you open a new account it will lower your score, however if you pay your account on time over time it will raise your score. 10% current credit you have and experiences you've had with the accounts. Use this formula and 7 tips to increase your credit score and maintain it. You can achieve your goals and be on the road to good credit with a little time determination.
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