Mortgage Monday: Improving Your Credit Score, continued…

8. Show a long credit history. Time is a big factor in proving your credit-worthiness. Consumers who are new in the credit market will simply have to establish credit over time to see their credit score increase. If you’ve built your good credit over many years, paying your debts as agreed will be evidence in your credit report, increasing your credit score. Also factored in your credit score are your credit accounts for a longer period of time, and managing them well show you can handle your debt. Be careful about closing your older accounts if you have several fairly young accounts; this can lower the average age of your accounts and lower your credit score.

9. Only open new credit accounts if you need them. You don’t want to open more accounts than you need just to raise the credit-utilization ratio; this can backfire and actually hurt your score by lowering the average age of your accounts. If you’re shopping for a new loan or credit card, do it within a short amount of time; your credit score won’t be affected by having several inquiries on your credit report if they are all within about thirty days of each other. They understand that you are in the market for the best terms on a loan and they give an allowance for that.

10. Remember that there is no “quick fix” for your credit score. Your credit score is determined by many factors, and since every consumer has different types of loans, a different length of time in the credit market, and a different situation, the method of credit scoring will not be exactly the same for everyone. Some actions may help one person’s score and hurt someone else’s. The best answer is to manage you debts responsibly and your credit score will gradually improve.

11. Check to see if all your accounts are reporting to the credit agencies. If you’ve been told that your were denied credit because of an “insufficient credit file” or “no credit file” and you have accounts with creditors that don’t appear in your credit file, ask the consumer reporting companies to add this information to future reports.

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