CREDIT TIPS

Improve your credit score with these simple tips

FICO reports that 60% of Americans score less than 750 on their credit score. And so, most people have room to improve to allow them access to more or better credit opportunities.

What do the credit scoring models look at? 

  • Past payment performance – recent late payment count more
  • Derogatory items – foreclosures, bankruptcy, tax liens, etc.
  • Credit utilization – do not max out your cards
  • Credit history – the more on time payment history, the better
  • Types of credit – mortgages, student loans, and government loans count more
  • Inquiries – minimal promotional or “soft” inquiries will not impact your report

How to improve your credit

  • Pay down credit cards below 30% of the available balance
  • Do not consolidate credit cards – low balances on a few are better than a high balance on one (except student loans)
  • Keep only a few credit cards – having too many signals the potential for large debt
  • Correct errors
  • Think twice before disputing an item –  it will put a temporary exclusion of that debt, which lenders don’t allow.
  • Time – the more time that passes since credit was established or improved; the better score.

How long do items remain on my credit? 

Negative items such as bankruptcies, short sales, or foreclosures will impact your score for seven years, and will remain on your report for ten.

What else shows up on my report? 

More than you may realize… Public records are pulled into the credit reporting systems to show tax liens, bankruptcy, etc. When your social security number was issued; addresses you have lived at; work place history and aliases for your name (such as a maiden name) will also appear.