A lot of people don’t know what’s on their credit report. Sometimes things are placed on a credit report by mistake. If something bad is placed on your file it can drop your credit score. Lenders and other financial institutions use credit scores to see what the probability of you defaulting on a loan.
A credit score can range from 300 to 850. The higher your score the better chance you have of receiving credit products such as mortgages and credit cards with a lower rate of interest. There are a number of things you can do to increase your credit score. Actually there are five things that contribute to your credit score. The first one is your payment history. When you pay your creditors on time you help increase your score. This category actually makes up 35 percent of your credit score.
The other factor is the amount of debt you have. If you have too much debt your credit score can be lowered especially if you are using a large portion of your available credit. The other contributors are the type of accounts, such as a mortgage, automobile loan, and credit cards. The more different types of credit you have the higher your score.
The amount of time your credit file has been outstanding will also contribute to your credit score. That’s why it is not a good idea to close out your old accounts. Actually closing any account can lower your credit score.
The number of new accounts opened can also affect your credit score. Opening too many accounts can lower your score especially if it is done in a short period of time.
You can receive a free copy of your credit report, once a year, by going to www.annualcreditreport.com. The copy is available every 365 days from the day you last received a copy. So you don’t have to wait for the first of the year.
When you go online to get your report you will be able to receive a copy for all three credit reporting agencies, which include, TransUnion, Equifax, and Experian.
To Your Great Success
Mel
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