Friday, July 4, 2008

10 Tips for Improving Your Credit Score

Your credit score is a three-digit number that ranges from 300-850, and it's based on your payment history, outstanding debts, length of credit history and amount of new credit. The higher your credit score, the less risk you pose to lenders and the more likely it is that you'll ge their best available rates.
Here are some tips that can improve your credit score:
  1. Request a copy of your credit reports and review it for accuracy. You can request a copy of your credit report free from each of the three credit reporting agencies (Equifax, Experian and Trans Union) at or call 877-322-8228.
  2. Pay your bills on time. Even if you have had late payments in the past. Many lenders place greater importance on more recent credit history.
  3. Use credit cards responsibly. Showing that you can manage credit cards responsibly; you will appear less risky than someone who does not use a credit card.
  4. Reduce your credit card balances. Having a lot of outstanding credit card debt or being at or near your credit limit can lower your score.
  5. Open new credit cards only as needed. Opening many new accounts will lower your average account age, which can have a negative effect on your score if you don’t have enough other credit information.
  6. Avoid opening new accounts when you're applying for a loan. If you have a short credit history or very few accounts, opening a new credit line may lower your score.
  7. Shop for a loan within a focused period of time. When you comparison shop for a single loan at various financial institutions, your potential lenders may request your credit score. Each inquiry will appear on your credit report. The inquiries that occur within a short period of time won’t lower your score, but those that occur over a longer period of time could.
  8. Re-establish your credit history. If you have missed payments or had credit problems in the past, opening new accounts responsibly and paying them in a timely manner will raise your score over time.
  9. Consult a credit counselor. If you are in danger of falling behind on your payments or if you already have, a legitimate, non-profit credit counselor can negotiate lower interest rates on your behalf and set up a debt repayment plan.
  10. Stay away from bankruptcy. Filing bankruptcy can lower your score by 200 points or more. In addition, bankruptcies are reported for up to ten years, so your ability to get a loan could be decreased during that time period.
Call or stop in to speak to one of our Member Service Specialists to discuss how to improve your credit score.