How can you improve your credit score?

Contrary to popular belief, it IS possible to change your score in the time between when most people decide to buy a house or refinance their mortgage and when they apply.

Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies. If you need to dispute an account, click the following link for a Sample Credit Dispute Letter.

Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time your score goes down until time passes without any inquiries. Changes in the law though have made "consumer-originating" credit report requests not count so much. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. Basically, a consumer can have their credit pulled for mortgage and or auto related loans an infinite # of times within a 45-day time frame, and it WILL NOT affect your score. This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what's on them, and smart consumers shop around for the best mortgage and car loans.

Unsolicited credit card solicitations in the mail don't count against your credit report, so don't worry.

The two main components of your credit score are #1: your payment history and #2: the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as many as 10 years, can significantly lower your score. It's never a good idea to take on more credit than you can handle.

Late payments can also work against you, especially the more recent the late payment. It's extremely important to pay bills on time, even if it's only the monthly payment.

Don't "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better. It's best to keep your balance at or below 10% of the credit limit. If you can't get balance down to 10%, strive for below 30% and if that can't be achieved, strive for below 50% of the limit.

If you carefully managing your credit, it's possible to add as much as 50 points per year to your score.

If you wish to download a document that may be easier to view and save for future reference, please click on the following link: Credit Scoring and How it Works for what I hope can be very helpful information to you.

If you'd like additional information on credit scoring, go visit this page on my site. Understanding Your Fico Score