Manage And Improve Your Credit Score With These Hacks

GOLDEN VALLEY, Minn. - Want to improve your credit score, Take a page from the best. People with excellent scores know that following a few basic rules is the key to success. Dan Ament, Financial Advisor with Morgan Stanley, joined KARE 11 Sunrise to talk about the importance of improving your credit score - and how to do it.

Just one late payment (overdue by 30 days or more) can damage your score. Utilize your credit (30%) - First, pay down balances intra-month to reduce your utilization of available credit. Also, request a higher credit limit. Finally, even if you stop using a credit card, consider keeping it open so your score benefits from the available credit (unless there is an annual fee you need to avoid).

As a guideline, experts often recommend using no more than 30 percent of the credit available to you to show lenders that you can manage credit responsibly. Length of credit history (15%) - Having several years of credit usage under your belt also elevates your score. The average age of revolving credit accounts among FICO high achievers is a little more than nine years for those in the 750-799 range and almost 12 years for higher scorers.

Be wary of regularly opening new credit accounts that may shorten the average age of your credit history. Look for cards with rewards that fit your needs. Scan each report, looking for possible errors or signs of fraudulent activity, such as an incorrect credit limit on a card or an account that you never opened. If you spot a problem, you can take steps to dispute and correct it. If you suspect fraud, you should also take measures, such as enacting a fraud alert.

Be sure to get this in writing so that you can use it if and when you need to dispute the account with the credit bureaus. Depending on the type of public record, most will stay on your credit report for seven to 10 years. All bankruptcies may report for 10 years from the filing date, though discharged chapter 13 bankruptcies usually stick around for seven years. Since payment history is the largest factor of a credit score, derogatory credit reporting can wreak havoc on your scores.

Fortunately, a few late payments won’t automatically kill your FICO if you have a decent overall good credit history. Having an overall good credit file can help offset a few payment missteps. Keeping your credit utilization low is key. Create as much space between your balances and your high limits on your revolving debts as possible.

Having a good mix of revolving credit and installment loans such as auto or mortgage can also help. Be sure to alert your creditor if you know you’ll be late making your next payment. Some creditors will allow a one-time payment amnesty. Yours may be willing to if you have a good relationship and track record with them.

It may sound obvious, but there’s no better thing you can do to counteract those late payments or negative items than to immediately start paying on-time. You’d be surprised how quickly on-time payments can outweigh the bad stuff. Then, it’s just a matter of hanging in there. The older the late incident gets, the more your scores will improve.

Late payments and negative information can hurt your credit scores, but as long as you’re diligent about getting and staying current, your credit score will recover sooner than you think. With 17 years in mortgage banking, Craig Berry has helped thousands achieve their home ownership goals. Connect with Craig on Twitter or Facebook. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

Here's the formula for success no matter which model lenders use. Your credit score—the three-digit number that creditors use to evaluate the risk when they lend you money—helps determine which loans or interest rates you qualify for and how much you’ll pay. Landlords, utilities and cell-phone companies may also check your score before doing business with you. Dozens of credit scores may be attached to your name, including versions tailored to specific industries, such as auto lending.

On-time payments. Both FICO and VantageScore prize on-time payments above any other factor. As long as you pay at least the minimum due each month, your payment history will stay clean (though you will rack up interest on your balance). Lenders typically don’t report a late payment to the credit bureaus until it’s more than 30 days overdue. If you make a late payment, it won’t haunt you forever: The impact on your credit score will diminish as long as you consistently pay your bills on time.

Your credit utilization ratio is the amount you owe on your credit cards as a proportion of the total limit on each card, as well as the total limit for all of your cards in aggregate. He suggests aiming for a utilization of 1% to 9%, rather than zero, because you can pick up a few more points by showing you are managing your credit well. You can improve your utilization ratio by spending less on your credit card and by asking your issuer to raise your limit.

Applying for a new card would also increase your available credit (but having too many accounts showing balances can lower your score). Most credit card issuers report the balance from your monthly statement to the credit bureaus. To make that balance appear lower, dole out a few mid-cycle payments or pay off your bill shortly before the closing date for your monthly statement. A long track record.

This slice of your score considers the age of your oldest account and the average age of all your accounts. Opening new cards may improve your credit utilization ratio, but it also lowers the average age of revolving accounts, which lowers your score. Other factors. A mix of revolving and installment loans also boosts your score. But don’t overdo it when applying for new credit. Having “hard inquiries” on your credit report from potential lenders will temporarily shave points from your score. When you’re shopping for a mortgage, student loan or auto loan, inquiries made within a certain time period, typically between two weeks and 45 days, count as one inquiry.

Getting free access to your credit report and credit score can be easy. In just a couple minutes, you can see how your credit is, but only once a year. This is the government-authorized clearinghouse for getting your credit reports from each of the main bureaus at no cost. The latter is based on your TransUnion credit report.