How To Improve Your Credit Score Essay

Once you have your credit report and your credit score, you will be able to tell where you stand and where many of your problems lie. If you have a poor score, try to see in your credit report what could be causing the problem: -Do you have too much debt?
-Too many unpaid bills?
-Have you recently faced a major financial upset, such as a bankruptcy?
-Have you not had credit long enough to establish good credit?
-Have you defaulted on a loan, failed to pay taxes, or recently been reported to a collection agency? The issues that contribute to your credit problems should dictate how you decide to boost your credit score. As you read through this book, highlight or jot down those tips that apply to you and, from them, develop a checklist
of things you can do that would help your credit situation improve. When you seek professional credit counseling or credit help, counselors will generally work with you to help you develop a personalized strategy that expressly addresses your credit problems and financial history. Now, with this book, you can develop a similar strategy on your own – in your own time and at your own cost. When developing your action plan, know where most of your credit score is com- ing from: 1) Your credit history (accounts for approximately 35% of your credit score) Whether or not you have been a good credit risk in the past is considered the best indicator of how you will react to debt in the future. For this rea- son, late payment, loan defaults, unpaid taxes, bankruptcies, and other un- paid debt obligations will count against you the most. You can’t do much about your financial past now, but starting to pay your bills on time – starting today - can help boost your credit score in the future.
2) Your current debts (accounts for approximately 30% of your credit score) deal If you have a lot of current debt, it may indicate that you are stretching yourself financially thin and will have trouble paying back debts in the fu- ture. If you owe a lot of money right now - and especially if you have bor- rowed a great deal recently - will bring down your credit score. You can boost your credit score by paying down your debts as far, and as fast, as you can. (usually below 35% of your credit limit) 3) Length of credit history (accounts for up to 15% of your credit score) If you have not had credit accounts for very long, you may not have enoughof a history to tell lenders whether you make a good credit risk. You can counter this by keeping your accounts open rather than closing them as you pay them off. 4) Type of credit (accounts for approximately 10% of your credit score) Lenders like to see a mix of financial responsibilities that you handle well. Having bills revolving accounts, as well as, one or two types of installment loans can actu- ally improve your credit
score. As you can see, it is possible to only estimate how much a specific area of your credit report affects your credit score. Nevertheless, keeping these five areas in mind and making sure that each is addressed in your personalized plan will go a long way in ensuring that your credit repair plan is comprehensive enough to boost your credit score effectively.