by Dawn Svoboda, Branch Manager/Loan Originator, Academy Mortgage
Ahigher credit score means lower mortgage interest rates, better credit card offers and better insurance rates. Not all credit problems are the same, because the reasons for a low score vary, depending on your personal credit history factors, your current financial situation and your money management style. But no matter what the reason is, there are three basic steps everyone can take to create your own personalized plan to improve your credit score.
1. Learn about things that negatively impact your credit score. Your credit score is based on five keys factors, and they hold the solution to improving your credit. If you can get these five things right, your score will go up naturally and easily over time.
- Payment history is the most important credit factor, because it shows whether you pay your debts on time, every time.
- Credit utilization describes the amount of credit you’ve used in relation to your total credit limit.
- Credit age shows how long you’ve maintained your credit accounts, and older is better than younger.
- Credit mix is the variety of credit accounts you have. More than one type shows you can manage a range of credit products.
- Inquiries show how often you apply for credit and what types.
Find out your credit score for free today on Credit Sesame.
2. Check to see exactly which credit factors are causing your low credit score.
When you check your free annual credit reports (available at annualcreditreport.com), you will begin to see what is causing your credit score to be low. When you compare them with your free credit report card on Credit Sesame, you will learn what you need to do to improve your credit score. Our service is 100 percent free, and there’s no hidden charge. Rest assured, you never have to input a credit card number or your full Social Security number, and all data you provide is safely encrypted.
3. Follow the steps in this guide to fix your issues
Read through this guide and see which actions will work for your particular credit and financial situation, and get started improving your credit score as quickly as possible.
These things negatively impact your credit score every time.
Not all credit problems are the same. Late payments, collections, bankruptcy, a large number of credit inquiries, a high credit card utilization rate and even credit report mistakes all have a negative effect on your score.
The following are the worst things that can happen to your credit score:
- Letting an account go delinquent.
- Maxing out a credit card.
- Picking up a negative public record (foreclosure, bankruptcy, judgment, lien, wage garnishment).
- Becoming the victim of identity theft.
The first step is to diagnose the reason for your less-than-perfect credit score.
Academy Mortgage Corporation LO State Lic AZ #0913936 | Corp State Lic AZ #BK-0904081 | Corp NMLS #3113 | Equal Housing Lende