Tip #1: View your personal credit report
Your credit reports from Equifax, Experian and TransUnion. Each credit report is a detailed snapshot of credit cards and loans opened in your name, companies accessing your credit file, delinquent payments and more. Access your personal credit report thru http://www.myfico.com/ There is a fee charged for this report.
Tip #2: Pay Your Bills on Time
Your current FICO Score is: 707
Your simulated FICO score would be in the following range:
707 to 727
This simulation is based on your making payments on all of your bills for the next 1 month.
Paying your bills on time is a substantial factor affecting your FICO score. Generally speaking, if you have no negative items on your file, your score will remain fairly stable as you continue to pay your bills on time.
If you have some history of late payments, how recent they occurred is important. The more recently they happened, the more impact they will likely have on your score. As they age, their impact on your score will gradually lessen.
Tip #3: Clean up your credit
Get copies of your credit report. Clean up any errors in the reports. If an ex-spouse has credit problems, write a 100-word (or less) letter of explanation to the reporting agency as allowed under the Federal Fair Credit Reporting Act. Tell the service your situation, explain your hardship and that the credit problem was not caused by you.
Tip #4: Retitle your property
If you’re divorced, there was probably a distribution of property made either by agreement or ordered by the court. Either way, it should be clear who now owns the home, the accounts and other assets. Similarly, if you are widowed, a will probate may have made ownership clear. Hopefully, you planned the inheritance together.
Your attorney will likely change the title on deeds. But when it comes to brokerage accounts, insurance and other securities, you’ll probably have to do it. Go back to your asset list and gather the pertinent documents. Have at least 10 copies of the death certificate, letters testamentary or divorce order ready. You may also need a tax waiver, proving that all estate taxes were paid, if you are widowed.
Systematically contact all the institutions and custodians of accounts, and get the paperwork they require to transfer title.
Tip #5: Pay Down $750 of Your Total Credit Card Balances
Your current FICO Score is: 707
Your simulated FICO score would be in the following range:
707 to 727
How you manage your revolving accounts (credit cards, department store credit cards, revolving lines of credit) is heavily weighted in the FICO score. FICO scores evaluate your revolving accounts in a variety of ways, including comparing your balance to your available credit, as well as looking at the number of accounts with a balance. A general rule to remember: consistently carrying lower balances on your revolving trade lines will generate positive points for your score.
This simulation was based on your paying down $750.00 of your overall credit card balance over a period of 1 month. In general, your score should improve as your credit history ages. So your score simulation took into account both your lower balances and the aging of your credit history.
(Remember, even if you pay your credit cards in full each month, the balance shown on your credit report may not be $0. Instead, it will reflect your account balance at the time your lender supplied the update to the credit reporting agency.)
Tip #6: Improving Your Score: Payment History
- Pay your bills on time.
- Delinquent payments and collections can have a major negative impact on your score.
- If you have missed payments, get current and stay current.
- The longer you pay your bills on time, the better your score.
- Be aware that paying off a collection account will not remove it from your credit report.
- It will stay on your report for seven years.
- If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor.
- This won't improve your score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.
Tip #7: Improving Your Score: Amounts Owed
- Keep balances low on credit cards and other "revolving credit".
- High outstanding debt can affect a score.
- Pay off debt rather than moving it around.
- The most effective way to improve your score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
- Don't close unused credit cards as a short-term strategy to raise your score.
- Don't open a number of new credit cards that you don't need, just to increase your available credit.
- This approach could backfire and actually lower score.
Tip #8: Improving Your Score: Length of Credit History
- If you have been managing credit for a short time, don't open a lot of new accounts too rapidly.
- New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.
Tip #9: Improving Your Score: New Credit
- Do your rate shopping for a given loan within a focused period of time.
- FICO® scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
- Re-establish your credit history if you have had problems.
- Opening new accounts responsibly and paying them off on time will raise your score in the long term.
- Note that it's OK to request and check your own credit report.
- This won't affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.
Tip #10: Improving Your Score: Types of Credit Use
- Apply for and open new credit accounts only as needed.
- Don't open accounts just to have a better credit mix - it probably won't raise your score.
- Have credit cards - but manage them responsibly.
- In general, having credit cards and installment loans (and paying timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
- Note that closing an account doesn't make it go away.
- A closed account will still show up on your credit report, and may be considered by the score.
Financing
