Raising your credit score

*NOTE - This article was originally written in August of 2006 for the newsletter.

According to myfico.com, “in a given three-month time period, only about one in four people has a 20-point change in their credit score.” Most credit experts agree that there is no such thing as a quick fix for bad credit. The best strategy is to manage credit responsibly over time. Here are some tips for raising credit scores:

• Pay your bills on time - Late payments, collections, etc., can have a major impact on a credit score.
• Get current and stay current on your payments - A higher score will be reflected when bills are paid on time over a longer period of time.
• Keep credit card and other revolving lines of credit low - Keeping the balances on credit cards and revolving lines under 50% of the balance can give a score a big boost.
• Pay off debt, don’t move it around - If debt can’t be paid off or paid down, don’t consolidate it onto one account where the balance is close to or at the limit. This can have a negative impact on your credit score. Keep a balance of 50% or less of the limit to keep credit scores higher.
• Closing an account doesn’t make it go away - Even though an account is closed, the payment history of that account will still report for years. The more time between the last late payment and when a credit report is run, the less it affects the score.

*Thanks to Alysa McLaughlin of Doering Mortgage on putting together this article. Give her a call at (636) 734-8396 or visit her on the web at loanmomma.net.