It is no secret to anybody who has ever required a loan from a lending institution that one of the determining factors is a good credit score. Credit scores generally depend on the system the lending institution uses for evaluation, and sometimes the rates may differ but one thing is sure: if you have one very good score from one of the reporting agencies, your loan is almost 100% guaranteed and no financial institution will reject your application.
Here are a few things to keep in mind when it comes to credit scores:
The Things That Impact Credit Scores
Generally, the information impacting scores depends on the system being used but some of the common elements are the public records of one person, the overall debt, the number of payments being late and the type of accounts that person holds.
Your Credit History Is Critical
It is important to keep a very good credit history account, as your history will tell your lenders if you are to be trusted or not. Some of the questions your lending company may ask will help them better understand your credit scores and your overall credit history:
Are your bills paid on time?
How long have you had your credit cards for?
Have you opened more credit cards lately?
How much overall debt do you have, in comparison to your credit limit?
The answers to these questions will generally help your lenders understand if you are actually a risk or not, when it comes to repaying your debt.
Steps to Take to Improve Your Credit Score
Generally, credit scores reflect the patterns of credit you have maintained over time, with a focus on recent information, going back a couple of years.
To make sure your credit scores are actually improving, there are a few things you can do:
- Make sure all your bills are paid on time. Late payments on utility bills and collections will definitely have a negative impact on your scores. Even if you have a rather insignificant amount to pay for an utility bill, make sure that one is paid on time, this is more important on the long-run than anything affecting your credit score.
- Keep very low balances on all your credit cards or other revolving credit resources, as a big debt on these can affect credit scores in a rather negative manner.
- Do not apply for more credit accounts at once, only apply when needed. Opening accounts to have a better credit score overall will definitely not help your situation.
- Instead of moving your debt around, try and pay your actual debt, don’t just move it to another account. Many people will go closing unused cards, hoping this will improve their scores. This may actually work on a short-term and it can influence your overall rating
A Few Things to Keep In Mind
Time is your main ally.
It actually takes a lot of time to improve and fix your credit score. If your score is full of negative information, such as a load of late payments, too many inquiries on your credit scores or a bankruptcy record, the only ally in this situation is time, as there is actually no quick fix for this.
A credit score is not rebuilt.
A consumer actually rebuilds their credit history, not the overall score. Most public record items like bankruptcy filing remain on your credit report for up to seven years, some of them for 10 to 15 years.
Don’t buy into miracle solutions.
Any expert will tell you that companies promising to help you re-establish credit scores for a fee are actually not to be trusted. No matter how many companies can tell you that, you should know that no one is able to change the information on your credit file. Only the actual creditor company will be able to alter it, so paying a third-party to review your credit report will be part of a full scam. So, keep these things in mind before actually contacting a miracle company:
1) The Credit Bureau will not be able to remove any negative info from your report, before the legal period has actually expired.
2) There is no legal loophole allowing any credit repair company to save your credit score, no matter how much money you are prepared to pay for it.
3) There is nothing you cannot do yourself, in order to improve the credit history and your score.
