7 Tips To Increase Your Credit Score
By Greg Quincy, Thu Dec 8th

Having a high can mean the difference of thousandsof dollars of saved interest expense compared to others with alower score. For example, if you improve resultsfrom the credit bureaus, just a few points that increase yourcredit score can make huge difference in the interest rate youwill pay for a home purchase. It pays to increase your creditscore!

The most commonly used credit scores available to lenders areFICO scores, which is a scoring method created by Fair, Isaac &Co...FICO!

These scores are provided to lenders by the three major creditbureaus: Equifax, Experian and TransUnion. Before we get intosome tips how to improve credit scores, it pays to review themajor areas that determine your FICO score.

1. Payment history on credit and retail store cards, loans andmortgages. 2. Amount that you owe. Credit agencies look at howmany accounts have balances and the proportion of that balanceto the credit line. 3. How long is your credit history? Thelonger the better. 4. New credit accounts. Applying for a bunchof credit cards all at once can hurt your score. 5. Differentcredit types, such as mortgages, retail loans, credit cards andinstallment loans. 6. How many late payments do you have?

Now, with the playing field laid out, let's work to boost yourcredit score! Some methods that boost your taketime, months or years, and others areas to improve credit scorecan be made with a phone call right now! That said, here are the7 tips to raise your credit score!

7 tips to improve credit scores

1. Pay your bills on time. Your payment history is a majorfactor (35% of your FICO score) in determining your creditscore. If you pay your bills late, or had an account referred tocollections, your will take a major hit. 2. Sign upfor online banking and make sure your regular recurring billsare paid automatically. This way you will not forget a paymentthat will wind up reducing your credit score. 3.   Increase yourcredit limit. Another large factor is the amount of your debt inrelation to your credit limit. If you have a card with a $10,000credit limit and your balance is $9,000, this will not help toimprove your score. To make the debt/credit limit ratio lookbetter, you can try to call your credit card company and requestan increase in your credit limit. Don't use the extra creditthough! That defeats the whole purpose and puts you further indebt! 4. Don't apply for many cards at once. This will notimprove your because this is a characteristic ofhigh credit risk groups. 5. Don't ever close an open credit cardaccount. If you pay off a credit card down to a zero balance,leave it open. Remember that a positive factor for your creditscore is how much available credit you have at your disposalwhen compared to your credit balance, in addition to the lengthof your credit history. 6. Apply for loans within a two-weekperiod. Every time you request a loan and the lender pulls yourcredit report, it can hurt your score. It is part of the FICOformula that reasons "this person is trying to apply for creditand loans and possibly be trying to live way beyond theirmeans!" If you keep the loan process within a two-week period,all of the credit report lookups are bundled together as onesingle request! 7. Check for errors on your credit report.Examine your credit report for errors and contact the creditreporting agencies to fix any errors on your credit report.

If you take action and follow these tips, you will be able togive your and immediate boost and graduallyincrease it even more as time passes. The major keys are to payyour bills on time and reduce your debt amounts when compared toyour credit limit. This has a twofold benefit of improving yourcredit score and reducing your debt.

About the author:Greg Quincy is the publisher of the websitewww.financialtipsforyou.com, offering his insights and personalfinance budget tips that he has gained from working in thefinancial industry and the economic challenges of raising afamily. Copyright © 2005 FinancialTipsForYou.com