How can you improve your credit score?

You can improve your credit score, but it takes time. It's said that by carefully managing your credit, it's possible to add as much as 100 points per year to your score.

 The higher your credit score, the easier it is to qualify for a house. Here are some strategies you can live with to make sure when you apply for a loan your score is as high as possible.

How to fix your credit score.

Start now to improve your credit score! It is the most importation factor in qualifying for a home.

1. Order a copy of your credit report.
2. Dispute any inaccuracies.  Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Sample letter.  
3. Negotiate with your creditors to pay off old debts. For example, if you own a creditor $500.00, see if they will settle for a lessor amount in exchange for removing the debt from your credit report. Ask them to put the settled amount in writing and mail it to you for payment. Sample letter.

Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score goes down until time passes without any inquiries. Changes in the law though have made "consumer-originating" credit report requests not count so much. Also, a series of requests in relation to getting a mortgage or car loan is not treated the same as a number of credit card requests in a limited time. This is because the credit bureaus, and lenders, realize that people request their own credit reports to keep up with what's on them, and smart consumers shop around for the best mortgage and car loans.

Unsolicited credit card solicitations in the mail don't count against your credit report, so don't worry.

The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as many as 10 years, can significantly lower your score. It's never a good idea to take on more credit than you can handle.

Late payments work against you. It's extremely important to pay bills on time, even if it's only the monthly payment.

Dont "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better.

Reasons for mistakes on your credit report
Credit report errors occur for a number of reasons but they can all have a negative impact on your eligibility for any future credit. It's important to stay on top of your credit report to avoid any mistakes made by the creditors and credit bureaus —Equifax, Experian and TransUnion. Some common reasons for credit report errors include: 

• The individual has applied for credit under several different names (i.e. John Doe and Jonathon Doe)
• Someone made a clerical error in entering or reading information (names, social security numbers, addresses, etc.) from a handwritten application.
• Mix ups with common names. For example, there is likely more than one John Smith living in New York City and often there is the chance that information intended for one John Smith might appear on another John Smith's credit report as he applies for a mortgage.
• The individual gave an inaccurate Social Security number or the number was misread by the creditor.
• Loan or credit card payments were inadvertently applied to the wrong account.

No matter what the reason, the erroneous information could reflect poorly on your credit file, thus causing approval problems when the time comes to apply for a job or obtain a mortgage. If you find errors, no matter how small, be sure you get them fixed, and make sure that you contact all three credit bureaus with your change.

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