How to Improve Credit Score Rating
Credit score ratings play a vital role in our life as if you have good rating then you can qualify for loans at good interest rates and lower monthly payments. A good credit score will also help in employment opportunities as well as finding house on rent and other similar requirements.
Having excellent credit score ratings tell creditors and financial institutions that you pay your debts with a sense of responsibility and in time. For them there is less risk in extending finance to you are compared to people who have low credit score rating. If you are in the 720 and above credit score range then it would be quite easy for you to avail loans or mortgages with faster approval. So it is of utmost importance that you know what your FICO score is and work towards improving it.
Your credit score rating is determined by the three credit bureaus looking at various factors such as your overall credit history, number of credit accounts with outstanding balance, payments on present loan accounts, any charge offs, late payments, collections, foreclosures, judgments and loan defaults. If you make payments to your creditors on time then you can expect to have a good credit score rating.
But even with on time payments you may find that your score is not as good as you expect. To know it is so you will have to take a copy of your credit report and check the entries that are present in the report. It might be that you are victim of identity theft where someone has used your Social Security Number and other confidential credit card details to open a credit account and stopped making payments.
The other reason which could be hurting your credit score rating would be creditor entries which you have already paid off but the creditor has not yet reported them to the bureaus. In such situation what you can do is send a letter asking him to send the updated information about your account to the credit bureaus so that it gets reflected in your account and helps in improving the score.
The credit score might not be reflecting the actual value as there could be some items in the credit report which you have disputed but have not been removed yet from your report and as soon as these are removed from the report you can expect to see an improvement in the credit score rating.
You can check the following credit score rating scale to judge in which range you fall into and the efforts you need to put in to improve your score.
If you are looking to purchase a car, get a mortgage, or take any other type of loan then it is very important that you start to plan early, check your credit report to know if there are any wrong entries in your account and take action to correct them. It takes about 60 days for the corrections made by credit bureaus to reflect on your report and score so the earlier you will take action the faster the problem will be resolved and help to improve your credit score rating
- What Is a Good Credit Score – The Facts You Need
- Free Credit Score – Check Yours Now
- Learning What’s a Good Credit Score
- A Basic Understanding of Credit Score Definition