Improve Credit Rating Score

How to Improve Credit Rating and Score

With so many people financing new homes, credit scores become very important. The credit score affects the amount of interest you pay, plus your ability to borrow money. The rewards of raising your score speak directly to your wallet: You'll qualify for more loans and be offered better interest rates.That's why it's important to improve your score.

Examine your credit report carefully. Nearly every consumer has an error on at least one credit report from one of the major credit bureaus. Credit bureaus generate your report on information they receive from your creditors; they don't verify.

Reviewing the reason codes will tell you where you need to focus. When you order your credit score, it includes "score reason codes" to explain the top reasons your score was not higher. These codes can give you an idea of how you should start improving your score, such as closing unused credit accounts or being more diligent about making payments on time.

Here are general tips for improving your credit score:

• Check your credit report and remove any errors.
• Get your FICO score and review the reason codes provided with your score.
• Get current and stay current on your monthly bills.
• Don't use any more than 50 percent of your available credit.
• Do not have too much credit. If you have a bunch of open accounts you don't use, consider closing them.
• Pay off your debt, don't consolidate. Consolidation only moves your debt around.