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Help with a loan
How to improve a low Credit Score
If you have a recent bankruptcy on file, repossession,
foreclosure, missed or late payments... it will take time to bring
your credit score back up after such a blow. If you are in this
position, in the mean time just be sure to borrow "within your
means" (although you may have trouble getting approved for
any new credit) and don't overextend yourself. Keep paying your
bills on time, and you will be back on the road to raising your
credit score.
If you pay your bills on time, don't have a recent
bankruptcy on your record, and don't have any missed payments or
collections on file, look at your credit card balances. Normally
you will want to keep your debt-to-credit limit ratio, on your credit
card accounts, below 25%. If you owe more than 25% of your total
credit limit on your credit cards, consider paying them down.
Example: if you have a credit card with total credit
line of $10,000, and you have a balance of $2,500 on the card, you
would owe 25% of your total credit line on that card.
Also keep in mind that even if you pay your credit
card balance off each month, it still may be reported to the credit
bureaus that you are carrying a balance on that card. It depends
on what time of the month your credit card issuer reports to the
credit bureaus, they will list whatever your balance is on the day
they report it. However, most (if not all) lending institutions
are aware of this, so this is generally not something to worry about.
Too many open credit card accounts
Also, too many open credit card accounts can be a
bad thing. But, if you already have several open credit card accounts
in good standing, don't cancel them, the added "good"
credit history can help your credit score. If you find that you
have way too many open credit card accounts and you have decided
to cancel some of them, be sure to cancel the most recently opened
accounts. Keep the oldest accounts open. Normally the longer your
payment history on an account, the better your credit score will
be.
Try not to open any new credit card accounts that
aren't necessary. Generally when you open a new credit account,
it will lower your credit score slightly, at least for a short period
of time.How you manage your "revolving credit" (credit
card accounts) is a big factor in determing your credit score.
Newly Opened Credit AccountsUsually your credit score
will take a slight hit from newly opened credit accounts such as
credit cards, auto loans, or mortgages. How many points your score
will decrease depends on how many times you have applied for credit
in recent months.However, this decrease is only temporary, your
score should rise again after several more months of making your
payments on time. Normally this is not something to worry about,
unless you have submitted many applications for new credit in a
short period of time. That may indicate to credit issuers that you
are beginning to overextend yourself (applying for too much credit),
or that you are being denied credit and you keep trying other lenders
hoping for a different result.
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