Your Credit Score: Improve It Now!

05/28/2007
No Credit History

Everyone knows that it’s good to have a high credit score. But what is considered a good score? Anything better than 600 or so is considered decent. If your credit score is already good, there is room for improvement, and if it’s bad, you can turn it around. You can’t do it overnight, as if by magic, but it can be done, regardless of what there might be in your past. If you’re patient and careful, you can have a credit score that opens doors for you.

Here are some basic tips:

• Look at your credit report at least once a year. Read over it carefully, looking for outdated, inaccurate, or misleading information. Have anything erroneous fixed at once.
• Find out what your credit score is. You do this by having any of the credit bureaus sending it to you. They’ll give you your credit score for a small fee, and since they use different formulas, their figures might be slightly different from one another.
• Keep as few open accounts as you can. Don’t apply for credit just because you get a good credit card offer in the mail. You don’t need more than three or four cards. The more open accounts, the more your credit score drops — and that’s even if you don’t actually owe anything on them. Why is that? Because as long as the account is open, you COULD start owing on it. There’s potential debt there.
• Keep balances low. A good rule of thumb is not to owe any more than 30 percent of your total credit limits. The higher it goes, the greater chance you might miss a payment, and your credit score goes down.
• Pay on time! Paying late is a sure way to sink your credit score fast. If something happens and you can’t pay when it’s due, talk to your lenders right away and work something out. If it’s something like an extended illness or injury or job loss, you can write an explanation and have the credit bureaus include that with your credit report.
• If your credit history has some blemishes on it, and your credit score is low, you might try opening some new accounts and paying them off immediately. That helps create good credit history and shows you’re responsible.

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