Get copies of all 3 credit reports.
According to federal law, you are entitled to a free copy of your credt report from each of the 3 major credit reporting agencies annually. Check out www.annualcreditreport.com to request each one. Remember- different creditors report to different agencies so info that shows one one may not show on another. You can also call 877-322-8228 or request by mail to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
Pay your bills on time.
This is one of the most important steps you can take, and the easiest! If the creditor offers automatic payments, do take advantage of it. Of course, you'll want to make sure that you have the money in the bank for automatic payments.
Understand how your credit score is determined.
The one thing that baffles us is how a credit score is actually determined.
- Payment history - Do you pay your bills on time? If you have late payments, collection accounts or bankruptcy this will eventually show up on your credit report.
- Outstanding debt - Are you maxed out on your credit cards or lines of credit? Scoring models compare the outstanding debt ot the credit limit. Bottom line is the more available credit you have, the better your score will be.
- Length of credit - Just turn 18? A short credit history could potentially be a negative factor. Offset this by making timely payments and low balances.
- New credit accounts - Too many inquiries on your credit may negatively affect your score. Pre-screened offers and your own inquiries do not count as applications, however, applying for several different accounts may show negatively.
- Quality of accounts - Having a healthy mix of installment accounts, credit cards and loans will help improve your score. Beware - too many of one type of account may result in a negative score.
Legalities of your credit score.
Correcting errors on your credit score is a must. Don't let erroneous info bring your score down. Visitwww.ftc.gov/bpc/edu/pubs/consumer/credit/cre03.shtm to learn how to fix problems.
Beware of credit-repair scams.
Although there are a few legitimate resources for low/cost or no-cost help with repairing your credit score, there are many companies that will try to take advantage of you. Don't be fooled! Visit http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre24.shtm for improving credit-worthiness.
Jennifer Mayo, CDPE
The Phoenixville Property Expert
Century 21 Norris-Valley Forge