What do you think goes into calculating your credit score? There are a number of things that go into determining how banks and other creditors determine if and what to lend a person, and at which interest rate. And by learning about these five factors, and positioning your behaviors to strengthen these items, you can boost your credit score in a matter of months.
1) Pay on time or pay ahead. Never miss a payment to anybody. This is critical to establishing trustworthiness with someone else's money.
2) The percentage owed versus available balance. Keep this ratio under 50%. If you have a credit line of $1000.00, keep your amount owed under $500.00.
3) Number of open accounts. If you have an excessive number of open accounts, you are more likely to be spread too thin. Consider consolidating some of these accounts into a single account and closing the extra accounts.
4) Number of credit inquiries. If you are constantly trying to get additional credit, you may be sending up red flags to the credit grantors indicating that you are on a fishing expedition for more credit. Instead, talk with your existing creditors about increasing your available credit, and reducing your interest rate.
5) Inaccurate credit reporting data about you or any of your accounts can play a huge negative role in determining your credit score. Get copies of your credit report and dispute any invalid data or account information immediately. You can get your free credit report from each of the three major credit reporting agencies at http://www.annualcreditreport.com.
Knowing these five factors to your credit score will help you manage your credit and improve your credit rating quickly and with great results.
