Many people have questions regarding their tarnished credit and search for ways to improve it. This three digit score is very important when you are shopping for new credit, or buying a home. It is the most important factor to analyze your financial worthiness. Your potential creditors will grant you new credit after reviewing the following areas on your credit report.

1. Your total payment history
2. How much is your total balance owed
3. Length of the credit score is determined
4. The types of credit used so far.
5. New credit is analyzed.

Go through the following tips and see how your credit scores can improve.

Check for any incorrect items on your credit report – Checking your credit report mandatory. There are possibilities of the three credit reporting agencies making errors since they handle zillions and zillions of consumers’ files. It is suggested to check the report once every six months and if you are applying for a new loan, check it frequently.

Timely payments – It’s a very good practice to pay the bills on time. The prompt payments will reflect on your credit report and you will be placed in a very comfortable position while applying for new credit from lenders. A late or a missed payment just before applying for new loan has severe effects on your credit reporting and the scores will go down. If the payment is missed from the last five years, it doesn’t have that much negative impact on the credit scoring.

Keep the credit balance to the minimum – It is always recommended to keep the credit card balance at the minimum. If you owe a large amount of credit, the FICO scores are affected. The FICO scores will stay good if you keep your balance less than 25% of the total credit card limit.

Regular and timely payments – Keep the debt to income ratio as low as possible. It is suggested not to close an account and transfer the balance to another account. This is because the ratio of the credit card balance is linked to the credit limit. And when you transfer the balance, the credit scores are lowered. It will be a wrong move to make especially when you are working hard on improving your scores.

Keep unused accounts active – Don’t close any unused account when you are applying for new credit. At the same time, don’t open new accounts because there’s no long payment history on that account. If you are having an old account in good standing, it will help your credit scores to improve. The lenders will need every proven track record of your credit history.

Try the following tips on your tarnished credit. You will see tremendous improvement over a period of time.

This entry was posted on Wednesday, December 12th, 2007 at 6:36 am and is filed under Credit, Credit Repair. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.