How to Improve Your Credit Score
Credit scores reflect a borrower's credit payment patterns over time with the most emphasis placed on recent information. Thus, sometimes the only way to improve a credit score is to establish strong payment histories over a long period of time. However, there are some other strategies that you as a potential borrower can employ that may have a positive effect on your score.
- Pay down the balances on revolving accounts. Credit scores are more negatively affected by delinquencies on revolving credit than installment credit. In addition, high outstanding balances on revolving accounts can have a major impact on the score. By reducing the balance, but not closing the account, you will improve your balance and high credit ratios, positively impacting your score.
- Pay past due accounts current.
- Avoid credit surfing. This is the practice of shifting revolving credit balances from one card to another, usually to take advantage of low introductory interest rates. The combination of inquiries and newly opened balance, especially since new balances will show on a credit report before old ones are reported as paid, can make a consumer appear to be looking for an opening and abundance of new credit.
- Avoid finance company credit. New credit in the form of cash loans from a finance company will much more negatively affect your score than other installment or revolving debt. You should also avoid 90-day or 12-months same-as-cash finance company transactions in the months preceding your loan application.
- Have erroneous information corrected or updated. You should pay particular attention to making sure that when having your credit histories updated, you ensure that the credit reporting agency accurately notes the dates of last activity and/or delinquency, since recent information has the greatest impact on credit scoring.
Where to Write and Dispute Errors in Your Credit Bureau Report
INFORMATION SERVICE CENTER
P.O. BOX 740241
ATLANTA, GA 30374-0241
NATIONAL CONSUMER ASSISTANCE CENTER
P.O. BOX 949
ALLEN, TX 75012-0940
P.O. BOX 390
SPRINGFIELD, PA 19064-0390
Remember, you must write the credit bureaus to dispute errors that you find in your report. They will not take information over the telephone!
Get Your Credit Score for Free
Under the FACT Act amendment to the Fair Credit Reporting Act, you are entitled to one free credit report file in a 12-month period. To request this free annual disclosure, visit www.annualcreditreport.com to make an online request or download a mail request form, or simply call 1-877-322-8228.