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A credit Score is a formula that tells a potential
creditor how likely you are to default on a loan.
Credit
scores range from 350 to 950
A Credit
Score is composed of the following:
Payment
History 35%
Balances
on credit accounts 30%
Length of
Credit History 15%
New Credit
10%
Types of
Credit used 10%
To improve your credit score, start by checking your credit reports for
any inaccurate or outdated information.
If you find any inaccurate information on your credit report, write to
the credit bureau and dispute it
By federal law, credit bureaus are required to remove any inaccurate,
outdated or unverifiable information from your credit report within 30
days of receiving your dispute
If you have any accounts past due, it is very important that you bring
your accounts up to date, so they are reflected on credit reports as
“current” or “paying as agreed”
Do not max out your credit cards, this means try not to charge more than
35% of the credit limit. For example, if your credit limit is $5000, do
not charge more than $1750
If your credit card balances are more than 35% of your credit limit, try
to pay down your balances, this will make a huge positive impact on your
credit score
If your creditors are not reporting your credit limit to the credit
bureaus, have this information corrected, since this may lower your
score
Limit the number of credit inquiries to a minimum. If you are shopping
for a car, credit scores interpret inquiries within a 14-day period as
one inquiry, so do it within a 14-day period
Always pay your bills on time, even one late payment can doom you, and
lower your credit score up to 100 points. Even libraries are now
reporting your late payments to credit bureaus
Have a mix of revolving and installment credit. Revolving means credit
cards, installment means car loans, mortgages or student loans
Do not close old accounts, even if you do not use the account anymore.
Part of your score is based on the length of your credit history. If you
close one of your oldest accounts, it will shorten your credit history,
and lower your score
Gerardo A
is the owner of
http://www.goodcredit4life.com. Visit his website to learn about
credit restoration, how to fight identity theft, credit scores and
finances management
Gerardo A
is the author of this article. You can check his website at
http://www.goodcredit4life.com where you'll find useful info about
credit reports, credit scores and credit restoration.
Article
Source:
http://EzineArticles.com/?expert=Gerardo_Aristizabal
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