Summary
At this point in time it is imperative that every individual spend as much time and take as much effort possible to insure that they have the best possible personal credit bureau score. Regqardless iof what bureau is used (TransUnion, Experiein or Equipfax) and what credit score model is used (FICO or Vantage Score). With lenders being very picky as to whom they lend to the best credit score will win the hearts and minds of the lender.
Analysis
At this point in time it is imperative that every individual spend as much time and take as much effort possible to insure that they have the best possible personal credit bureau score. Regardless of what bureau is used (TransUnion, Experien or Equifax) and what credit score model is used (FICO or Vantage Score). With lenders being very picky as to whom they lend to the best credit score will win the hearts and minds of the lender. Every consumer should take advantage of the regulations that allow everyone to obtain a free copy of their credit bureau report each year from each of the vendors. There are a number of web sites that can direct you to each bureau individually as well as some sites that will aggregate your information and request the reports from one site. Google "free consumer credit bureau report" and you will find the best way for you.How do you insure that you have the best credit score possible? Well, let’s focus on these top issues.1. Obtain a copy of all three consumer reports and check them for any incorrect information and any missing information that may help your score. Many consumers have no idea what information is and is not on their report. If something is incorrect you should gather all the documentation you can to contest the error and request that it is corrected. The best way to do this is via the mail. To be honest all three bureaus have not staffed properly or trained properly for you to talk to a live person. In fact the three bureaus did not support the government’s efforts to provide a free report every year. They were very concerned about the cost of having to administer this process. It may also take a few tries to get the information corrected. One piece of advice is to also get the support of the creditor if that is possible. Having them provide written proof of the error will go a long way in having the incorrect data fixed or removed. Just as making sure negative or incorrect information is removed it is also important that any previous or current long term loans are included in your report. Since your score is compiled on how long you have had credit experience a piece of credit you have had for 10 years or older ( a mortgage or home equity installment loan) could help your score unless it is or has been delinquent.2. Try to keep your outstanding balances on your revolving or credit card accounts as low as possible. If you have $25,000 in credit limits and you have only $5,000 left available you have a high outstanding to limit percentage which will hurt your score. Depending on many factors it is advisable to keep your total credit card balances as low as possible. Make sure you use your cards but if you consistently have most of your credit limit in use then your score will be lower than those who use a lower percentage of the total credit limit.3. Having the right mix of credit is also important. The consumer who has a mortgage, several installment loans (currently open and closed) as well as credit card accounts with a major bank and a few department stores shows lenders the ability for a consumer to manage a full range of credit types and will generally benefit by having a higher score.4. Make all your payments on time and before the due date. Late payments can really hurt your credit score. Late payments that have taken place the most recent can hurt your score more that late payments from a long time ago. Just remember late payments will hurt your score regardless of if they are old or more recent and late payments to multiple creditors will hurt your score even more. Make sure that you pay all of your bills. That includes cell phones, termination costs, library fines, traffic tickets, medical co-pays and deductibles etc. These will hurt your score if they are sent to a collection agency for action and they are reported to the credit bureaus. You have rights and remedies to contest these and that process can also be seen on various web sites. 5. Closing credit cards with big credit line limits can also hurt your score. Since a good portion of your score is based on the amount of credit you have available, any credit lines you close where your balance is zero will take that availability away and lower your available credit. Closing some smaller credit card limits will have a temporary effect on your score but your score will rebound as long as you keep the credit cards with larger limits in place and your keep balances outstanding that are 30% or lower of the credit limit. Just remember that charging a huge sum each month and then paying it off will not help our score. The credit score model does not reward that payment pattern. The key is to use your cards prudently and to keep your total credit card balances less than 30% of your total credit limits. In this current environment lenders are cutting credit limits to consumers and in that case a consumer’s usage may go up, due to no fault of his own. So it is up to the consumer to maintain his usage to limit ratio.6. Do not go on a credit spree and open up a significant number of new accounts. While this may help increase your credit usage to limit percentage is will show that recent new credit has been acquired and adding these new pieces of credit into your total credit mix may lower the overall length of your credit history. This will lower your score as well if you continue to open new credit accounts every six months or so. 7. Credit Inquiries also can hurt your credit score. Everything you fill out an application for credit and the lender runs your credit it shows up on your report. If you have too many inquiries over a short period of time it could and most likely will lower your score. Only apply for credit if you absolutely need it. If you are looking for a car for example and you look at three different cars the dealer at each dealership will send your application to many lenders. Since all of these lenders are making inquiries over a short period of time your score should not be affected. If you stretch your car buying experience over a period exceeding 45 days you may have your score affected. Its time for consumers to become fully educated on all the factors that concern the consumer credit bureaus. How to get them. How to read them, How to understand the dynamics of the credit score models and how to be proactive in managing the information that goes into YOUR report. Carpe diem!!!!!
