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10 Factors That Determine Your Credit Rate Score
By William Gordon | July 28, 2008
Are you thinking about buying your first house? You should know that all your past history of what you have bought, and repaid are combined into one number to tell your potential lenders if you should be trusted with a lot of credit or only a little. In other words, if you’ve made bad choices before, you’ll end up with a less than ideal house. There are some important factors that will show the strength of a person’s credit rate score, which are outlined below.
1) Are you always applying for credit?
Some people don’t realize that when they apply for lots of credit cards, they are actually hurting their credit rate score. Lenders like stability, and if people have been applying for lots of credit cards or small personal loans, it can end up hurting them worse than they realize. Even if you are being approved for these cards, your credit rate score could still take a hit as a result.
2. Take the time to check that all of your information is correct.
As having incorrect information held by credit bureaus can lead to a low credit beacon score. If credit reporting bureaus do not have basic information such as your correct home address and place of work, then your credit rate score can be negatively affected. You should always remember this, because it’s really of the utmost importance.
3) Are accounts open under your name?
Maybe there is an old credit card that you haven’t used since 2005. You might have thought you closed it down, but in reality, it is just sitting there on your credit report. It is important to keep all of your accounts in mind, even those that you don’t use any more. Having too many open accounts can negatively impact your credit rate score, so closing them down is something that could give you a boost.
4. Make sure the credit bureaus don’t destroy your credit.
By them, I mean the credit reporting bureaus. With so much information out there, mistakes are sometimes made. Make sure that they have the correct information, because if there is an error on your credit report, it could really be putting your credit rate score down. If you dispute these errors, then your chances of getting that loan will increase significantly.
5) Monitor your credit report.
It’s a really good plan to check up on your credit report every few months. Unauthorized transactions in your name can be avoided by doing so. As well, you should have some clues of what to do to raise your credit rate score in the future. Overall, it is just a good policy to closely police your credit score rating.
6. Pay your bills on time
This is far more important than most people realize. It’s very simple to understand; failure to pay bills on time will hurt your credit. Whenever this happens, it’s a “black mark” and your credit rate score is lowered.
7. Reduce the level of your debt
Having too much debt can kill your credit rate score. If you don’t have a big income and you have a lot of revolving debt, then lenders are not going to want to extend you any sort of loan. This is especially true of consumer debt, which is a known credit rate score killer.
8. Where you work and how much money you make.
Where you work and how much money you make is something that can have a profound impact on your credit rate score. Make sure that each of the reporting agencies has this information on file. The better your job, the better your score is likely to be, although this isn’t always the case.
9) Major detriments to you score are tough to fix.
Some things are more difficult to recover from than others. Things like a collection, bankruptcy, or foreclosure will take a long time to recover from. These are difficult situations that happen to many successful people, but you should keep an eye on your credit rate score while you are going through the difficulty.
10) Missing a payment is one of the worst things that drag down your credit rate score.
Of all of the little things that you can do to ding your credit rate score, missing a payment is right up there among the worst. Never, under any circumstances, let an entire period of time go by without making a payment on the account. Even if you don’t have the money to make a full payment, your credit rate score will benefit from paying something to your lender instead of missing the payment.
Topics: Finance |