How to Raise Credit Score

November 12, 2009

A few characteristics are significant in the determination of your credit score. The order of significance varies with each factor and the borrower can do much to improve on their score by learning these. Past payments for example are a major acid test by which your credit score is measured. Any failure shown in this period may be projected into the future affecting your application for mortgages and alternative loans.


The different credit lines in your portfolio are also checked for the use to which you have subjected them. Overloading such instruments for instance works negatively in your credit score knocking off vital points.
An assumption is made by lenders that: borrowers who’ve held their credit for a longer time show more credit worth. Otherwise the borrower is seen as relying too much on the prospective loan for more cash to allay their mismanagement. Those who are frequently prompted to initiate a request for extra loans on their credit cards may be candidates for disqualification. The lender figures this out as a need for short term debt instruments. Such a borrower is therefore unable to make the installments required in the long term by their mortgage.


The ability of spreading out your risk over a wide range of credit instruments offers you a better chance at getting a mortgage or alternative loan. Such a situation presents a borrower who is making regular and fixed payments to settle their balances in revolving funds and installment loans. Relying mainly on a secured credit card however is the bane of your loan application. A good option in these circumstances is to check frequently on your credit score in order to make the required corrections. In some cases, you will find that the entries made in your credit report are actually majorly due to the error of the reporting agency. The federal law provides you with protection against wrong credit reporting and you could resort to this in case the agency is not attentive.

Timely payments, frequent checks on your balance sheet and follow ups on your loans also do a lot to increase on your credit score. For the worst hit, you could resort to debt consolidation. Debt counseling is better than declaring bankruptcy; it in fact raises your credit score where it would have never risen again. Opening accounts should only be done where it is required. This may reduce your score if done in a bad way but in the long run you get to have better scores due to your credit history.


The outstanding credit card balance is always reported to the credit bureaus irrespective of how fast you pay up. Charging less expenses on your credit card is bound to increase your scores and could well get you off the doldrums. The bureaus like a balance sheet that shows a big margin between your credit card debts. When closing your old accounts, do so only with good reason. Minimizing identity theft for example is a valid reason and will only affect a small part of your score.

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Written by Uncle Sam · Filed Under Mortgage and Loan 

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