Tristan Powys (Credit Counselor) @ Lucid Living
“Looking at your credit report, you can’t tell your credit worthiness,” says Kim McGriggs, Community and Media Relations Manager at Money Management International. “Many people assume that as long as they pay their accounts on time, they have an excellent credit status. Seeing one’s credit score can be a real eye-opener.”
Consumers don’t realize that their credit score is made up of components other than just payment history – it includes credit utilization, the variety of credit lines (home loan, credit cards, vehicle finance etc.) and length of credit use. For such consumers, getting turned down for a loan is often the first indication that something is amiss.
The higher your credit score, the better shot you have of getting a loan (home, motor vehicle, personal etc.) or a credit card application approved. Improving your credit score takes time, but it can be done. Start by getting a copy of your credit report from Lucid Living.
1. Check your credit report for accuracy. Financial columnist Liz Weston, author of “Your Credit Score,” says to look for credit cards or other accounts that aren’t yours, blacklisting entries that are more than two years old, duplicate late payments and incorrect Identity Number. These factors can really hurt your credit score, so make sure there are no errors.
2. Dispute errors. Credit bureaus are required by law to investigate errors / mistakes you bring to their attention and report back to you. Typically, they ask the creditor that reported the blacklisting to check its records. If the creditor can’t verify the information or doesn’t respond, the blacklisting should be deleted.
This can be a frustrating and drawn-out process – requiring diligent telephonic follow-up and resubmitting documents several times – let Lucid Living take the hassle away from you. Lucid works with all registered credit bureau, and guarantees the fastest turn-around time and highest success rate for rehabilitating your credit worthiness.
3. Pay your bills on time. Payment history makes up more than one-third of the typical credit score determination, Weston says, so paying bills on time all the time is essential to maintaining a good credit score. If you’re forgetful, consider setting up automatic payments through your bank.
4. Pay down your debts. Lenders look at how much of your available credit on cards and credit accounts you are using. If you are maxed out or close to it, lenders could assume you’re on the financial edge and not lend you money. “Strive for a “utilization rate” of between 50% – 65% – this is considered acceptable credit exposure,” says Kim McGriggs.
5. Keep credit cards and other revolving accounts open. You may be tempted to close old accounts you’re not using, but that won’t help your credit score and may actually hurt them. It reduces the amount of your available credit (i.e. increases your credit utilization), which can lead to a lower credit score.
If the particular account is among your oldest, its age boosts your credit score.