Has your Credit Score Surprised You?
When most people are surprised by their credit reports, it usually an unpleasant surprise. I once found that one of my credit scores was 50 points lower than my other two. The reason: an insurance billing error I disputed five times was never removed from one credit report.
We get emails all the time from people who can’t understand why they weren’t approved for a credit card. The problem is often a credit report error. One recent visitor who was denied for a credit card who insisted he had excellent credit wrote us back to say that one of his credit reports was filled with incorrect information. At first he thought he had been a victim of identity fraud. After a few calls to the credit bureau, he found out they had mixed information from someone with the same name with his information.
Loading … Loading …This is not an uncommon situation. So, today’s poll is in two parts. After you vote, please feel free to post a comment. Any information you can share can prove helpful to other readers.
November 5th, 2008 at 11:33 pm
I will start it with an example as in you may be out of school, but that doesn’t mean you’re free from report cards. In fact, if you want to buy a house, or any other big-ticket item, a lender will look up your “grade” as soon as you come knocking. That grade is your credit score.
There are many varieties of credit scores available to lenders. But the most widely used for large loans are FICO SCORES, which are based on a scoring system developed by Fair, Isaac & Co. Following are five things you can do to boost your creditworthiness, plus more information on obtaining your personal score.
1.) Review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan.
2.) Paying your bills on time is always a good practice, and it’s especially critical that you make prompt payments close to the time you need a loan.
3.) A heavily weighted factor in your FICO score is how much money you owe on your credit cards relative to your total credit limit. Generally, it’s good to keep your balances at or below 25 percent of your credit card limit
4.) Pay off debt rather than moving it around i.e. since the ratio of your credit card balance to your credit limit is key, closing out an account and transferring the balance simply means you increase that ratio, which is likely to lower your score.
5.) Don’t close unused credit card accounts near loan time.
November 12th, 2008 at 11:58 am
Thanks for the comment Max.