Looking forward to improve my credit score

Hi

Welcome to the forums. It's nice that you are concerned about your credit worthiness and seek to improve your credit scores.

As you are applying for a loan, you will have to work on improving your three digit credit score as it is considered to be an important factor to analyze your financial worthiness. You can acquire loans or credit from the creditors and other lending agencies who research on the following areas of your credit report.

• They check your payment history
  
  
• They keep a check on the amount that you owe.
  
  
• They evaluate the length of your credit history.
  
  
• They look out for the types of credit that you have used so far.
  
  
• They will look into your new credit.
  

First thing that you need to do from your side is to make sure that the data available in your credit report from the three credit bureaus is accurate. You can order a copy of your credit report from the three agencies and do a detailed comparison. If you find any inaccuracies, then you can dispute it with the particular credit bureau reporting it. They are required to conduct an investigation and notify you within 30 days with a free credit report after a change is made.

Second thing that you need to know to improve your credit score is to avoid applying for new credit in a large scale. Many a times, people find their mailbox filled with credit card solicitations. These are called "spot" inquiries according to the credit scorers and it does not affect your credit score. The thing that affects your score in a bad way is when you apply for too much credit in a shorter time. It thus affects your ratings in a negative manner. Since you are applying for loan, scorers make a special provision for mortgage and car loans inquiries because people tend to shop around more for these products.

Next factor that you should consider for improving your credit score is to be active in all of your payments. Scores deeply evaluate your payment history and your amounts that are in due. Late payments reduce your scores largely, so you should remember to pay all your loans on time no matter if you are just paying the minimum balance.

A person who files for bankruptcy will have bad affects since it stays in his credit report for as long as 10 years and the scores are largely lowered on foreclosures.

It is always beneficial to reduce the credit card balances as much as possible. The FICO scores get affected due to how much money you owe on some cards relative to your total credit limit. Credit scores are seen improving if the balances are kept below 25% of the credit card limit.

While you are applying for a loan, it is suggested not to close any unused account. At the same time, it is suggested not to open a new account also during that time. It is said because if you are having a short credit history or less number of accounts, the credit score gets lowered when a new account is opened as there is no proven track record of it.

If you consider the following aspects, and see that your financial history is not troubled then you don't need to worry at all. You will be able to add as much as 50 points in a year to your score. Your credit report is in your hands and you should consider every important point to improve your credit rating.

Regards
Roxette