Credit Scores
How To Raise Credit Scores
Many loans today depend on a good credit score. There are several techniques available, which can be used to raise your score:
1. Credit scores are heavily affected by credit utilization, i.e. the level of use of open accounts. For example, a person with a $500 balance on a card with a $3,000 limit will score higher than a person with a $2,500 balance on a card with a $3,000 limit.
Solution: Call your credit card company and raise your credit limits on as many cards as possible. This will make you seem less maxed out and raise the score.
2. The optimum amount of revolving accounts to have open is 2-4. Any more than that will pull the score down. Credit scores are reduced for people worth 5 or more open revolving accounts. This is why after a debt consolidation loan, the credit score usually increases.
Solution: If you have 5 or more revolving accounts, have the balances transferred to another card and close the original account. Also, unused department store cards lower the credit score, so close these types of accounts.
3. Credit inquires can lower a credit score.
Solution: Contact the credit bureau and dispute many of the recent credit inquiries. You should say that you did not authorize those credit inquires and want them removed.
4. Any type of delinquency has a major impact on your credit score.
Solution: The burden of proof is on the creditor to show that you were in fact delinquent. Disputing an account that you feel is being reported erroneously may have a positive outcome if the creditor cannot support their claim.
Source: Walter Hollister, Addison Mortgage Group, Inc. Boca Raton, FL
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