Your credit score aka FICO is a measure of consumer credit risk has become the primary source of judging your credit worthiness.
The scores range from 300 to 850. A FICO score of 670 or above is considered good credit. An exceptional score is above 800. In other words the higher your credit score the easier it is to borrow money.
In an effort to increase your credit score, here's some things you can do:
1. Pay your bills on time.
2. Use your credit cards regularly so they are not closed down due to inactivity. Closing a card for any reason deletes the point gaining history of that card.
3. If you want to know your score, pay for it, by contacting all three credit bureaus and ordering your credit report with a score, about $10 per bureau. Remember: Only you can order your credit score without lowering your score. Someone else providing your score, even for free, will lower your score.
4. There are two types of credit.
Installment and Revolving.
An Installment payment, is a regular payment usually for the same dollar amount, like when you buy an appliance, car, or fixed mortgage payment. This will slowly add about a point a month to your Credit score.
A Revolving account refers to a credit card payment. If you pay the minimum payment on time you receive about a third of a point per on time payment. Pay more than the minimum payment by about 20 percent extra, and receive about 2 thirds of a point per payment. Pay off a revolving amount owed, in full and receive a whole point, whether you pay off $5 or $500.
Charge a small amount on several cards each month and pay them all off in full to rapidly increase your score.
5. At least once a year call and ask every credit card to increase your line of credit to a higher amount. An easy way to lose points when paying on time is to carry a balance forward that is over one third of what you could borrow or your total credit limit. While this may only cost you one point if you owe more than one half or 50% of your limit, you could lose 5 points a month and owing over 75% of your credit limit could cost you 10 points a month.
6. Consider carefully whether you should open a new credit card as just opening a new card usually is going to lower your score. When you look at your credit report look at the months of history that you have used each card for. Until a card has a 24 month of use history it is not considered to be a mature card. Until a card is mature it tends to lower your credit score.
7. Getting out of debt is a great way to raise your credit score. Taking on new debt tends to lower the score. After all the score just represents what kind of risk it is to loan money to you. So many people will pay off the cards with the highest interest rate first while making smaller minimum payments to the lower interest rate cards. While this makes sense it is important to pay down on the cards that have approached their limit first, so that point loss does not destroy your credit rating.
8. It is important to remember that a lower interest rate is often available to the consumer just by asking for it. This could also accomplished by letting the card Grantor know that you will be taking your business elsewhere if they do not want to match the better offers of credit that are available to you.
9. In the fine print of my own credit report under a category called Mailing Preference I first discovered the opt out number 1-88-567-8688. " Credit Reporting companies, such as Trans Union, occasionally provide your name to direct marketing companies offering goods and services which would seem of interest to you. if you do not want to receive these mailing, you have the right to deny permission of the use of your name for these purposes. Simply call the toll free automated marketing Opt-out telephone line, 1-888-567-8688. You will be prompted to give your name, address, and social security number. your name will be removed from all of the credit bureau marketing lists." This will also have the effect of raising your credit score.