Advice for Cleaner Credit
PAY YOUR BILLS ON-TIME. Your payment history is the most important factor in determining your credit score. Recent history carries more weight in determining credit score than what happen 5 or 10 years ago. So if make it a habit of paying your bills on time, it is a great way to start rebuilding your credit rating. Note that this is most important when you learn how to rebuild credit! NOTE: If you miss paying your bills (EVEN ONCE) it will knock 50-100 points off a good credit. PAY DOWN YOUR DEBTS Lenders like to see plenty of breathing room between the amount of debt reported on your bad credit cards and your total credit limits. The more debt you pay off, the wider that gap and the better your credit score. CONSIDER CHARGING LESS What many people don’t know is that credit scores don’t distinguish between those who carry a balance on their cards and those who don’t. So charging less can also improve your score — even if you pay off your poor credit cards each month. DON’T CLOSE OLD, PAID OFF ACCOUNTS Here’s the word from direct from Craig Watts, an executive at Fair Isaac & Co., one of the leading credit scorers: “Closing accounts can never help your score, and often it can hurt.” Shutting down credit accounts lowers the total credit available to you and makes any balances you have loom larger in credit score calculations. If you close your oldest accounts, it can actually shorten the length of your reported credit history and make you seem less credit-worthy. DON’T BE AFRAID OF CREDIT COUNSELING! If you’re overloaded with high-interest debt and are in danger of falling behind on your payments — or you already have — consider working with a nonprofit agency such as Consumer Credit Counseling Services to set up a debt repayment plan.
