Easy Steps To Boost Your Credit Score

For those interested in buying your own home, there's a very important factor that creditors consider when deciding the interest rates of your loan. Your credit rating. A credit score is a numerical description of your financial trustworthiness and usually range from 300 to 850. A high number shows potential creditors that your credit habits are good. It indicates you make your payments on time as agreed and can be trusted. You carry debt that's much lower than your credit limit. And there's few or no derogatory marks on your free credit bureau report. If you have a high score, creditors are more inclined to approve your loan. It also means getting better interest rates.

So how do get your credit score. Legally you're able to get your credit reports absolutely free once a year. Unfortunately your credit score doesn't come with these annual free reports. It needs to be purchased separately through the 3 credit bureaus. But there are free methods to obtain a credit score for free from the 3 bureaus. But it usually means signing up for a free trial membership to their credit monitoring program.

And what's the best credit score to get? Each credit reporting agency produces their own score numbers, but you want to get is your FICO score. This is the score that most creditors use in making important loan decisions. Curently Equifax sells a FICO score. You can also purchase it from FICO directly. FICO is a separate entity from the 3 bureaus.

What are the steps to take to improve your credit rating? First is to pay down your revolving accounts like your credit cards. The idea behind this is that creditors like to see a large difference between your credit limit and your debt amount. There's nothing bad to spend up to your credit limit and paying it off every month. But it won't raise your score. If your goal is to improve your score, then you should go with the 30 percent formula and use less than 30 percent of the maximum.

Then correct the big mistakes. Significant errors include any data that isn't yours. Other errors are accounts mentioned as unpaid or were in collections more than seven years ago. Derogatory items prior to seven years are supposed to be removed from your files. In the case of bankruptcy filings, it's on your files for ten. But keep using your oldest cards that are clean. These help out in the rating formula. Just make a small purchase every month and pay it off each month.

Once in awhile vendors report a lower amount to the credit reporting agencies than what is correct. Ask the creditor to update this information. Also if there's late payments indicated on your report, ask the lender to delete them. The latter sometimes works for customers with good payment habits. The creditor may not always consent to this, but it can't hurt to ask.

Finally, dispute anything on your credit reports not shown as "current" or "paid as agreed". Anything the credit bureaus can't verify after a given period has to be erased from your file. 'nudge nudge' 'wink wink'. But don't go overboard with this method. Otherwise your claim will be taken as frivolous. First try disputing a few of the older accounts with bad marks. Then after a few months challenge a few more.

By following these easy tips to clean up your free credit score, you should considerably increase your credit score ratings.

Jeff Wise is a consumer advocate for freecreditreport issues. A credit free score for everyone.