The major credit bureaus, Transunion, Equifax, and Experian can all provide you with your credit report. Your credit report is a list of all the good and bad credit lines that you have had within the past seven to ten years. Your FICO score is a number assigned to you based on your credit report information. Bad credit will get you a lower score and good credit will raise it.
Needless to say, you want your FICO score to be as high as possible. This is what many creditors such as car loan companies, credit card issuers, and mortgage lenders look at when deciding to loan you money or not. Below are five steps to improving your FICO credit score.
Step One: Get Copies of Your Credit Reports
The first step in raising your FICO score is to get copies of all three credit reports from the agencies mentioned above. Many people are eligible for getting one free copy each year and they are easy to request online. You will be able to see what lines of credit are listed on there, both bad and good. You will have to pay a small fee to get your FICO score.
Step Two: Pay Your Bills
The second step is rather obvious. Pay all of your bills on time and in total. Having a lot of outstanding debt will lower your FICO score. If you are paying minimum amounts on lines of credit, increase the payments as much as you are able to.
Step Three: Refute False Information
If there is any false information on your credit reports, it could be negatively affecting your FICO score. To improve your credit score, you should dispute, in writing, all incorrect information. If you pay off a bill in its entirety, your credit report should indicate that.
Step Four: Do Not Apply For More Credit
Applying fore more lines of credit, or increasing your credit limits, can negatively impact your credit. While you are in the process of improving your FICO score, you should not apply for any more credit. Also, once all your existing bills are paid off or down, you should wait as long as possible to apply for more lines.
Step Five: Use Credit – Do Not Close Accounts
If you do have any positive lines of credit on your credit report, you can improve your FICO score more by continuing to use that credit account. Closing the accounts can have a negative effect. Potential creditors often look at how much credit you are using responsibly when they decide to give you a loan, mortgage, or other credit account.
Using the above steps to improve your FICO credit score will improve your chances of getting lines of credit from credit car companies, banks, mortgage lenders, and other institutions. Improve your FICO score and improve your credit!