Tips For Improving Your Credit Score

If you want to improve your credit score the best thing to do first of all is pay your bills on time. This one thing alone will do more to increase your credit score than you can imagine. Late payments can deflate a credit score because this is one of the criteria the credit bureau uses when they constructed the measuring tools for credit scores.

Also , if at all possible avoid any type of litigation or judgments, or liens. These are all considered derogatory credit and will decrease your credit score. Litigation is when someone brings a lawsuit against you. Of course these can’t always be avoided if someone feels they have a legitimate gripe. A judgment is similar it means someone or some organization filed a judgment or a claim against you in hopes of retrieving some type of monetary claim. This too was a matter taken to the courts.

Dispute any items on your credit file which are not yours. If you have items which were erroneously place on your file and they are derogatory items it will lower your credit score. Always dispute these in writing to your local credit bureau.

Watch out for authorized users on credit cards. First of all let explain what an authorized user is. This is a person that you have given permission to use one of your credit cards. To get an authorized user placed on your account you must first call your credit card company and give them particular information about an individual such as name and social security number. Your credit card company will in turn issue them a credit card, with your permission. This gives this individual the right to use your credit card to make purchases. However the authorized user is not legally obligated to make any payments at all. None. Any payment arrangements between you and the authorized user are just that, between you and the authorized user. If the account falls past due the credit card company will contact you for payments not the user. Even if the authorized user purchased $5,000 in merchandise and you purchased nothing, you can expect a call, as the primary account holder, from the card company on the delinquent account.

A delinquent account not being paid by the authorized user will show up on your credit file and lower your credit score, again even if you did not make the purchases.

Having a lot of credit card debt can lower your credit score. If you use up over 45% of your available credit it lowers your score.

If your credit file is new and you don’t have a lot of credit this too can serve to lower your credit score.

Other things to look out for are inquiries. An inquiry is when some organization takes a look at your credit file for whatever reason. Let’s say you go visit a card dealership because you are thinking about buying a car. If that dealership pulls up your credit file it leaves an inquiry. An inquiry is merely a notation left on your credit file in the form of a code or number to indicate which creditor has looked at your credit file.

Regarding inquiries, please note it takes a substantial number of inquiries in a given month to really do any type of damage. I don’t have a solid number, but I would guess somewhere in the area of 15 or 20 inquiries per month can have a negative effect on your credit score.