Credit Scores; What They Mean And How To Improve Your Credit

Credit Scores; What They Mean And How To Improve Your Credit

Credit Scores are a ranking system of your Credit to determine what you can buy and at what interest rate you will receive when buying.

Credit Lenders use a Credit Scoring system when extending credit to buyers. Good credit would be a score of 700 or better, 650-699, 600-649, etc. The higher your credit score, the better your credit and the lower your interest rate.

There are many factors that will lower your credit score. One of the main factors that lowers your score is inquiries and this is something you can work on immediately. Do not let your credit be pulled numerous times. When you go to buy a car, many dealerships will send your credit information to numerous lenders in the hopes of an approval from one of the sources. Try getting your financing worked out before ever entering the dealership.

Another factor that will lower your score is being over 30 days late on an existing loan, doctor bills, charge offs, bankruptcy, repossessions, etc. Try paying old debts off. Contact these lenders that were owed money and negotiate. Tell them you will pay a certain amount if the item were deleted from your credit report. Many will work with you because it is a debt they did not expect to see any money from.

A great tip to raise your credit score is to pay off some credit card debt. A credit card that has a $500 limit should have a balance of $250 or less for maximum points. If you have a $500 limit and you are maxed out, it will actually deduct points from your credit score. If you have no credit card debt, consider applying for a credit card and charge a small amount and pay it off early. Remember not to charge over 50% of what the credit limit is though or you will have points deducted.
Trading With Negative Equity