10 Factors That Determine Your Credit Rate Score

By: Richardlakin
Are you thinking about buying your first house? You should know that all your past history of what you have bought, and repaid are combined into one number to tell your potential lenders if you should be trusted with a lot of credit or only a little. In other words, if you've made bad choices before, you'll end up with a less than ideal house. There are some important factors that will show the strength of a person's credit rate score, which are outlined below.

1. Do you apply for credit often?

Rather you thought so or not, applying for many new credit cards hurts your credit rate score. When a person has applied for many credit cards or loans, the creditor looks at their history and sees instability. Even if you are approved as eligible for such cards, your credit rate score might still be impacted negatively as a result.

2. Make sure your information is correct

One of the biggest mistakes that people make when they have a low credit beacon score is that they don't double check the information at credit bureaus. All too often, your credit rate score can be hampered because the folks at the three major reporting bureaus don't have your correct employment or home information. These things are very important, so keeping them in mind is a must.

3. Do you have open accounts?

There might be an old credit card that hasn't been used in years. You may have forgotten about it when you cut up the card, but the balance still lurks on your credit report. Even if you have old accounts you no longer use, you still need to include it. The credit rate score of an individual can be negatively affected if he has several open accounts; hence, sometimes it is better to close them.

4. Don't let them mess your credit up!

Errors sometimes occur because there is a ton of information. Ensure the accuracy of the information. Errors in your credit report will affect your credit rate score. Disputing errors substantially increases your chance of being approved for a loan later on.

5. Be alert and monitor your credit report once every two months.

It's a really good plan to check up on your credit report every few months. Unauthorized transactions in your name can be avoided by doing so. As well, you should have some clues of what to do to raise your credit rate score in the future. Overall, it is just a good policy to closely police your credit score rating.

6. Pay your bills on time

This is far more important than most people realize. It's very simple to understand; failure to pay bills on time will hurt your credit. Whenever this happens, it's a "black mark" and your credit rate score is lowered.

7. Reduce the level of your debt

Having too much debt can kill your credit rate score. Lenders are not interested in making loans to people with a low income who constantly transfer one debt to another. Consumer debt can especially hurt your credit rating.

8. Employment

Where you work and how much money you make is something that can have a profound impact on your credit rate score. Make sure that each of the reporting agencies has this information on file. The better your job, the better your score is likely to be, although this isn't always the case.

9. Major marks against your credit

Some things are more difficult to recover from than others. Things like a collection, bankruptcy, or foreclosure will take a long time to recover from. These are difficult situations that happen to many successful people, but you should keep an eye on your credit rate score while you are going through the difficulty.

10) Missing a payment is one of the worst things that drag down your credit rate score.

Of all of the little things that you can do to ding your credit rate score, missing a payment is right up there among the worst. Never, under any circumstances, let an entire period of time go by without making a payment on the account. Even if you don't have the money to make a full payment, your credit rate score will benefit from paying something to your lender instead of missing the payment.
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