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Money’s Tips For Raising Your FICO Credit Score
By JLP | August 21, 2009
Here’s a couple pointers from the latest issue of Money Magazine on how to improve your credit score:
• Remember your credit card utilization rate, which is your total card balances compared to your total credit limits. To calculate this, divide your credit card balances by the total available credit. Money recommends trying to keep it at 10% but says this will be harder to accomplish with credit card companies slashing available credit and closing accounts.
• Keep your oldest cards in play. The length of your credit history plays a role in calculating your FICO Score so it’s a good idea to keep your oldest credit cards active. This could be something as simple as putting a monthly charge on your card and paying it off monthly.
One last thing, the article included a graphic that showed what goes into a FICO Score. They had a pretty graphic but I’ll break it down for you in percentages:
• 35% How timely you’ve been with payments.
• 30% How much you owe compared with your total available credit.
• 15% How long a credit history you have.
• 10% Whether you’ve recently taken on new credit/debt.
• 10% What mix of credit types you have.
As you can see, the first two are EXTREMELY important. DON’T BE LATE and DON’T CHARGE TOO MUCH!
Related:
My FICO Score is 794. What’s Your Credit Score?
The 2009 Personal Finance How-to Roundup
Bureaus Roll Out New Credit Score Formula for 2009
How Long Will It Take to Improve a FICO Score?
Topics: Credit, Credit Cards | 3 Comments »
August 21st, 2009 at 3:46 pm
Charging too much seriously affects your utilization rate. It kills me to see people use a loan to pay for a loan. I’s a bad cycle to get into and a good way to possibly pull down your score.
August 24th, 2009 at 12:20 pm
There certainly are no quick fixes in attempting to raise your credit score. The most important thing is to stay on top of things and know whats in there. There very well could be errors in your credit report due to things misrepresented, even fixing these is going to take time. In order to raise it though you have to know what’s in it for sure, as well as exactly what effects it.
One area I think that is very important to address in these times. Is to make sure that you don’t lose any of your cards. Companies are canceling cards that are not being used. This could be really damaging if its one of your oldest cards. Remember this, and just use the card every once in awhile to keep it in rotation. You need that available credit in theory at least.
Anyone who’s interested can check out my blog on how to improve your credit score at… http://www.thedebtgazette.com/2009/08/improving-credit-score/
August 26th, 2009 at 6:32 am
Today the whole world is suffer from crisis and thus in this situation it is very important to care of your credit cards. Use them very carefully and review your monthly credit bill reports.It is also necessary to Review Of Review Of The AA Credit Card periodicaly.