Credit Scores Free

A credit score is primarily based on credit report information, typically from one of the three major credit bureaus, Experian, TransUnion and Equifax. Since lenders or banks lend only against your creditworthiness, it does makes sense for you to know what factors determine your credit score.

What Is A Credit Score?
Based on the snapshots of your credit report, credit score is the number arrived to summarize your credit risk. It ranges from 300 to 850 and helps a lender to determine the risk level. Or we can put it like this, if I give this person a loan, how likely is it that I will get paid on time?

There are different methods of calculating credit scores. FICO is one of the most popular credit scores developed by Fair Isaac & Co. The higher is the FICO score the lower is the risk for lender.

What Affects Credit Score?
Your credit reports contains many pieces of information that reveals certain important aspects of your borrowing activities mainly focusing on:

Late payments
The amount of time credit has been established
The amount of credit used versus the amount of credit available
Length of time at present residence
Negative credit information such as bankruptcies, charge-offs, collections, etc.

Bad Credit Small Business Loans
Seeking loans with low or bad credit score can drive you up the wall. The mainline lenders may simply reject your loan application while the others from subprime market may charge you extortionate rate of interest on your bad credit small business loan.

In case you are an entrepreneur and need new business loan for growth or expansion, bad credit can put you in pickles. In such a scenario, its better to go for cash advance option that is provided irrespective of you credit history. Such cash advance is given against your future credit and debit card sales.

What Is Cash Advance Option?
Cash advance is a small business loan approved against the monthly amount you process through credit card sales. Cash advance lenders do not ask you for your credit rating and can pre-approve your loan within 24 hours. A mutually agreed upon percentage from your daily sales through credit card processing goes to the lender automatically as repayment of the loan.

How To Increase Your Credit Score?
Your credit score cannot be improved in short run but a few steps can help you improving your credit rating over a period of time. Here are a few tips:

Pay your bills on time. Late payments and collections can have a serious impact on your score.
Do not apply for credit frequently. Having a large number of inquiries on your credit report can worsen your score.
Reduce your credit-card balances. If you are “maxed” out on your credit cards, this will affect your credit score negatively.
If you have limited credit, obtain additional credit. Not having sufficient credit can negatively impact your score.

Figuring out exactly how credit scores work is problematic. Like nuclear fission, learning Chinese and setting the clock on your DVD player, credit scoring is not something that most people can easily master.

In the complicated world of credit scores there is one fact that pretty much everyone assumes is true: late payments are bad for your credit scores. Not only are late payments bad, but they are also assumed to be one of the worst things you could do to your scores. The first sign of a late payment on your credit reports signals impending credit doom, right? It turns out that this isnt exactly the case after all.

There are thousands of slightly different credit scoring models used today, each with a different purpose and formula. The most common credit scoring systems are set up to predict only one thing: how likely you are to have a 90 day late payment or worse in the 24 months after your score is calculated.

Credit scores are used by financial institutions, insurance companies and utility companies as an efficient way to predict how risky a customer you will be. If your credit score is low, it indicates that you are more likely to make late payments or file costly insurance claims. In turn, this means that the creditor is more likely to lose their investment by lending you money. Once you understand that credit scores predict this specific behavior, its a lot easier to figure out the best way to manage your credit.

Because scoring systems are so focused on predicting whether or not youll go at least 90 days late, surprisingly, an old 30 or 60 day late payment is actually not that damaging to your credit scores as long as it is an isolated incident. Only when your accounts are currently being reported 30 or 60 days past due on your credit reports, will your credit scores plummet temporarily.

If your 30 or 60 day late payments are an infrequent occurrence, this kind of low level late payment will damage your credit score only while it is being reported as currently past due. They shouldnt cause lasting damage to your credit score after this period passes unless you make 30 or 60 day late payments on a regular basis. In this case, the fact that you are habitually late with your payments will cause long term damage to your credit scores.

Its a whole new ballgame once you have a 90 day late payment, however. If you have been over 90 days late (even just once), the credit scoring models consider you much more likely to do it again. One 90 day late payment will damage your credit for up to seven years. From a scoring perspective, a single 90 day late payment is as damaging to your credit scores as a bankruptcy filing, a tax lien, a collection, a judgment or repossession. Being 90 days late causes you to be viewed as a possible repeat offender and a higher risk to creditors. Heres a summary of how late payments impact your credit scores:

30 days late This record will damage your credit scores only when it is reported as currently 30 days late. The exception is if you are 30 days late often. Otherwise, a 30-day late payment will not cause lasting damage.

60 days late This record will also damage your credit scores when it is reported as currently 60 days late. Again, the exception is if you are 60 days late often. Otherwise, it will not cause long term damage.

90 days late This record will damage your credit scores significantly for up to 7 years. It doesnt make a difference whether or not your account is currently 90 days late. Remember, the goal of the scoring model is to predict whether or not you will pay 90 days late or later on any credit obligation. By showing that you have already done so means that you are more likely to do it again compared to someone who has never been 90 days late. As such, your credit scores will drop.

120+ days late Late payment reporting beyond the initial 90 day missed payment does not cause additional credit score damage directly. However, there is an indirect impact to your scores. At this point, your debt is usually charged off or sold to a 3rd party collection agency. Both of these occurrences are reported on your credit files and will lower your credit scores further.

If you continue to miss your payments beyond 90 or 120 days, the following records may also harm your credit score:

Collections Collections are the result of late payments. There are two types of collections; those that have been sold to a 3rd party collection agency or those that have been turned over to an internal collection department. Regardless of which one shows up on your credit reports, your scores will suffer.

Tax liens Tax liens are obviously not preceded with late payments on any sort of account. However, when tax liens are reported on your credit files they have the same negative impact to your scores as any other seriously delinquent account. And, just because you pay off the tax lien or have it released wont increase your scores.

Settlements Settlements are deals made between you and a creditor who is trying to collect a past due debt. Normally, you and the creditor would agree on an amount that is less than what you really owe them. Once you pay them, they consider the matter closed and paid off. However, they will report that you have made a settlement for less than your contractual obligation. This will hurt your scores as much as any other serious delinquency.

Repossessions or foreclosures Having a home foreclosed upon or a car repossessed are both considered serious delinquencies and will lower your credit scores considerably for up to seven years. The assumption normally made by the consumer is hey, I gave the home or car back to the lender, why are they going to show me as delinquent? The answer youll get from lenders is that you signed a contract with them to buy a home or car and pay it in full over a period of time. You failed to do so therefore they consider you to be in default of your agreement with them and will report this on your credit reports.

Remember, the goal of most credit scoring models is to predict whether or not you will go 90 days past due or worse on any obligation. Whats missing? The scoring models are not designed to predict whether you will default for any specific pound amount. As such, having a 90 day past due of only 100 is as bad as having a 90 day past due of 10,000. The same goes for low pound collections, judgments or liens. The pound amount doesnt matter. The fact that you paid late is whats most important in the eyes of a credit scoring model.

Now that our late payment secrets have been revealed, lets look at what it means to you. You should still avoid making late payments whenever possible. But we now know that one 30 or 60 day late payment isnt the end of the world. Since 90 day late payments are the real credit score busters, you should avoid a 90 day late payment at all costs.

If you already have a 90 day late payment record on your credit history then your scores are already suffering. Be certain that the information is being accurately reported. If it isnt then you have the right to dispute it with not only the credit reporting agencies but also with the lenders who reported it. Your goal is to have the item corrected or removed, especially if it is in error. Once removed or corrected your credit scores will immediately recover.

Nothing can create a spectacular sudden jump in your credit score. Developing a firm credit history will take time. There are no quick fixes in keeping up a good score. Improving your credit may not be quick, but there are some things you can do to improve your credit, the most important being that you raise your credit score by signifying that time after time you deal with your finances reliably.

If you want to improve your score, you need to pay your bills on time. it is the most important way to improve your credit score. It is never really too late to start. Even if you have encountered serious delinquencies in your past, these will count for less over time.

If you want to keep a good credit report, keep up with your credit payments. A lot of people have bad credit due to late payments. It has been said that it is better late than never, but this does not apply in keeping up a good credit score.

Keeping your balances low will help your chances of getting a good score. High debts will pull down your score so keep your credit balances low. It is important to watch your balances. If you notice that it is getting high, make sure that you maintain the account properly and dont open any other accounts.

Check your credit reports often. As much as possible, for every transaction, make sure to double check for inaccuracies. If there are corrections, make sure that you consult the lender or the borrower. If corrections are not handled properly, your credit health will suffer for sure. Can you imagine putting your credit health at stake due to the wrong information placed in your report? If you have encountered wrong information written in your report, there is no need to worry because it can be changed easily.

Pay off your debt rather than moving it around. If you consolidate your credit card debt onto another card or distribute it over multiple cards, this will not help to raise your score in the long run. The most helpful way to improve your score is by paying the debt that you owe.

Keep all your credit cards current and manage them correctly. Generally, having credit cards and installment loans that you have paid on time will definitely raise your score.
Most of all, you need to keep up discipline in handling your credit.

Trying to repair credit rating scores is not something you can do overnight. Neither is it something that someone else can do for you. There are ways to help you repair credit ratings, but you really do have to want to improve your rating to an acceptable level.

If you have been denied credit, chances are it is because you have a poor credit rating. To find out for sure, you can request a free copy of your credit report to see what information the report contains. Once you see that you have a lot of outstanding bills with missed or late payments, then you will have to take the necessary steps to repair credit rating. Although this wont happen overnight, there are ways to improve your credit rating.

One of the easiest ways to improve your credit rating is to start paying your bills on time. Many people have a poor credit rating simply because they are negligent in sending in the payments because they do not realize how important this is to their credit rating. Even if you have plenty of money coming in to pay your bills each month, you could still have a low credit score and have to start to repair credit rating.

If you are having difficulty making your payments, there are still ways that you can improve your credit rating. One of these is to contact your back and arrange for a debt consolidation loan. When you use this money to pay off your outstanding bills and make the payments on the new loan on time, it goes a long way towards the repair of your credit rating. Creditors look favourably upon this because it shows that you really do care about your credit and want to improve your credit rating.

Another of the ways to improve your credit rating is to contact the creditors to see if they will take a lower monthly payment. When you are able to manage a lower payment and have it in on time, then you are also taking steps to repair credit rating. Creditors will usually work with you to find a manageable amount because they do want to receive their money back. You can also start with the lowest amount and make higher monthly payments to repair credit rating. In this way you are rebuilding your credit and getting your bills paid off at the same time.

There are some simple steps to repair credit ratings, but it takes some effort.

Do you have a low credit score?

If your credit score is below 700, you may not qualify for some of the best interest rates on credit cards, loans or mortgages. This means that just by having a credit score of 695, instead of 725 (just an example), you may end up paying thousands more in interest on any new credit you are granted, which you can avoid by just taking some simple steps to increase your credit score before applying for a new personal loan, auto loan or mortgage. It is widely believed that a credit score of 720 or higher is ideal.

How to improve a low Credit Score

If you have a recent bankruptcy on file, repossession, foreclosure, missed or late payments… it will take time to bring your credit score back up after such a blow. If you are in this position, in the mean time just be sure to borrow “within your means” (although you may have trouble getting approved for any new credit) and don’t overextend yourself. Keep paying your bills on time, and you will be back on the road to raising your credit score.

If you pay your bills on time, don’t have a recent bankruptcy on your record, and don’t have any missed payments or collections on file, look at your credit card balances. Normally you will want to keep your debt-to-credit limit ratio, on your credit card accounts, below 25%. If you owe more than 25% of your total credit limit on your credit cards, consider paying them down.

Example: if you have a credit card with total credit line of 10,000, and you have a balance of 2,500 on the card, you would owe 25% of your total credit line on that card.

Also keep in mind that even if you pay your credit card balance off each month, it still may be reported to the credit bureaus that you are carrying a balance on that card. It depends on what time of the month your credit card issuer reports to the credit bureaus, they will list whatever your balance is on the day they report it. However, most (if not all) lending institutions are aware of this, so this is generally not something to worry about.

Too many open credit card accounts

Also, too many open credit card accounts can be a bad thing. But, if you already have several open credit card accounts in good standing, don’t cancel them, the added “good” credit history can help your credit score. If you find that you have way too many open credit card accounts and you have decided to cancel some of them, be sure to cancel the most recently opened accounts. Keep the oldest accounts open. Normally the longer your payment history on an account, the better your credit score will be.

Try not to open any new credit card accounts that aren’t necessary. Generally when you open a new credit account, it will lower your credit score slightly, at least for a short period of time.

How you manage your “revolving credit” (credit card accounts) is a big factor in determing your credit score.

Newly Opened Credit Accounts

Usually your credit score will take a slight hit from newly opened credit accounts such as credit cards, auto loans, or mortgages. How many points your score will decrease depends on how many times you have applied for credit in recent months.

However, this decrease is only temporary, your score should rise again after several more months of making your payments on time. Normally this is not something to worry about, unless you have submitted many applications for new credit in a short period of time. That may indicate to credit issuers that you are beginning to overextend yourself (applying for too much credit), or that you are being denied credit and you keep trying other lenders hoping for a different result.

Short Credit History?

If you have a very short credit history (length of time you have been using your credit), that can also be a reason as to why you have a low credit score. Keep paying your bills on time and follow good overall credit management, and rest assured – with time – your score will rise!

No Credit History?

If you have absolutely no credit history, your credit score will most likely be low to start with. You can get started by applying for a credit card in an attempt to establish your credit history, or if you are trying to obtain an auto loan, but haven’t had any luck getting approved because of a short credit history (or no credit history), you can ask someone you trust to help you by co-signing on a loan with you.

These are just 2 of the ways you can start establishing your credit, but probably the 2 most common ways. When you are approved for your first credit account, be sure to pay your bill(s) on time, and you will be on your way to a better credit score!

Keep Your Credit History Clean – Remove A Negative Credit Record From Your Credit Report.

It can make a difference of up to 18% in loan repayment costs.

For example, on a 30-year, 150,000 fixed rate mortgage, a borrower with the best credit score, 760-850, will pay 5.59%, or 860 per month, while someone in the worst score range will pay 7.18%, or 1,016 per month.

This can make a big difference to the household budget, so it’s to your advantage to keep your credit score as low as possible.
The 3 major credit bureaus, Experian, Equifax and Trans Union are similar and feature a “Credit Score”, which is derived from credit report information submitted to them about you.

Uner the Equal Credit Opportunity Act, a credit scoring system may not use characteristics such as race, sex, marital status, national origin or religion as factors, though they are allowed to use age.

Credit scores are determined by your bill-paying history, the number and type type of accounts you have, late payments, collection actions, and outstanding debt. The total number of points reflects how likely you are, statistically-speaking, to pay back a loan.

If you are denied credit, the Equal Credit Opportunity Act forces the creditor to tell you the specific reasons your loan application was denied if you ask within 60 days. Acceptable reasons include high balances on charge cards, or bad employment history. Unacceptable reasons include vague excuses such as “You didn’t meet our minimum standards”.

Sometimes you can be denied credit because of information on a credit report. The Fair Credit Reporting Act requires the creditor to give you the contact information of the credit report agency supplying the information.

The credit reporting agency can give you the information on your report, but only the lender can tell you why this led to your application being refused.

However your credit report may include inaccurate or incomplete information (credit records). Identity theft is a growing problem, and can take up to a year to resolve.

Nearly 10 million people fall victim to identity theft each year, costing consumers 5 billion and businesses 48 billion, according to the Federal Trade Commission.

In this situation you have to send letters to every one of the credit bureaus. Also learn your credit rights by familiarizing yourself with the Fair Credit Reporting Act (FRCA).

The FCRA gives you the right to dispute inaccuracies and omissions, and it requires credit bureaus to investigate your complaint (generally in thirty days), send you a prompt response and correct any errors.

The law as well requires the source of inaccurate information (such as a bank) to correct the record at the credit bureaus to which it initially provided the erroneous information.

Consumers working on their credit reports say many times their letters are ignored by credit bureaus. Consumers say even with proof a credit record isn’t theirs, its removal from their credit report can take 3 or even 4 challenge letters, because the credit bureaus will have only corrected the facts in their own files and not updated the credit report.

Send your dispute letter by REGISTED MAIL. Credit companies will respond faster if they know you can prove you filed a complaint on a certain date. Keep a record of when you sent the dispute letters and what date you should expect a response.

If you have received no defense to your claim after thirty to thirty seven days, send another registered letter requesting an updated credit report and demanding the disputed credit record be deleted.

If the bureaus don’t reply in the thirty days, it must be that the information they had on file was either inaccurate or unverifiable. In either case, based on data from the Fair Credit Reporting Act, the credit record must be immediately deleted from your credit report.

A few consumers have eliminated negative marks on credit reports just by going through this process of disputing credit records many times. Since some creditors will not take the time to respond, you can sometimes win by default.

Usually a bit of progress will be made with each challenge.Remember, the credit bureau would like you to quit bothering them because if you are not disputing the credit report, they can legally carry on selling it as profitable information.

You’re faced with a dilemma. It’s the end of the month and you have a stack of bills due. You were hoping to go on a special weekend getaway with friends, but don’t have the money to pay all your bills and enjoy the trip. You realize something has got to give, so you decide to skip a payment on your credit card to have money for the weekend. It’s only 30 days, you say to yourself, and you plan to really get serious about paying down your bills after this month.

That decision could cost you thousands of pounds.

“Making late payments is really the number-one way that consumers can damage their credit report and credit score,” says Chaomei Chen, head of credit risk for the credit card division of Seattle-based Washington Mutual. “Conversely, making on-time payments is the easiest way to increase a consumer’s credit score over time.”

Keeping Score On Your Credit Score

Credit scores are derived from information found in your credit reports, which are maintained independently by each of the three major bureaus-TransUnion, Equifax and Experian. The data is run through a mathematical formula to produce your “FICO” score. Fair Isaac Corporation (FICO) invented and popularized the methodology for determining consumer credit risk. Most FICO scores run between 300 and 850. The higher the score, the better, because consumers with high scores are offered the lowest interest rates for homes, automobiles and other consumer loans.

Even One Late Payment Can Hurt

Chen pointed out that only one late credit card payment could have a negligible effect on the score of consumers who already have a dramatically low FICO score, and conversely could drop the FICO scores of people who already have very high FICO scores up to 100 points. “That difference in FICO score can add many thousands of pounds in interest payments over the life of a loan. It’s in the consumer’s best interest to pay bills on time each and every month.”

According to Fair Isaac, for a 250,000 home loan, based on recent interest rates, a consumer with a 700 FICO score would have a monthly payment of 1,614 for a 30-year fixed-rate mortgage. A consumer with a 550 credit score would pay an estimated 2,094 a month for the same loan. That’s a difference of 480 a month, and 173,000 in additional interest over the life of a 30-year fixed-rate mortgage.

That weekend getaway has become very costly.

In addition to paying bills promptly, Washington Mutual- the only credit card issuer in the U.S. that provides its credit card customers free online access to their FICO scores-recommends other simple ways to increase credit scores, including:

• Pay more than the minimum due on credit card accounts each month.

• Keep the balances on revolving credit accounts below 50% of the credit line.

• Check your credit report at least once per year to ensure that information is being correctly reported.

Don’t be late in paying your bills. Even one late credit card payment can cause a credit score to fall up to 100 points.

Equifax is one of the top credit reporting bureaus and is well-versed in calculating your credit score based upon your credit history. Your credit score helps lenders to determine if you a credit worthy and your credit score can keep you from getting a loan from a lender.

To determine your credit score, Equifax uses a mathematical equation on information that is gathered from your credit file. This equation compares is against patterns seen on other files. The range of credit scores go from 300 to 850 and the higher it is, the better it is. As your information changes on your credit report, so will your credit score. It is very unlikely for some one to have the same score from month to month.

Equifax looks at many factors to determine your credit score. The following are just some of the factors that help them to calculate your score.

Payment History-If you have late payments reported on current or past accounts, these will lower your score.

Credit Owed-If you owe too much on your available credit, it will affect your score, especially if you are maxed out or close to it.

Credit History-How long youve had credit will also affect your score. If youve only had credit for a few months compared to several years, youre credit score will be affected.

Inquiries-If youve applied for credit with several lenders and creditors, it may lower your score.

Judgements, Bankruptcies, Collections-Any accounts that have been sent to collection or you have been taken to court on, including bankruptcy, will lower your score.

These, of course, are only a few of the factors that will influence your credit score.

If your credit score is not where you want it to be, there are ways that you can improve it.
The most important thing you can do to increase your credit score, however, is to pay your bills on time. If you do have a circumstance that you can not pay your bills, make sure you include a letter of explanation. This will be included on your credit report an calculated toward your credit score.

Credit repair scams are popular business in todays business environment. The Internet, in mailboxes, on the TV, telemarketers, and flyers left on car windows report how credit repair from companies can make getting out debt easy, and by using their services it will erase all debt instantly. The old saying of if it sounds too good to be true it usually is, should certainly be applied with scammers of instant credit repair. Know what to look for with these types of scam artists, and be on the lookout for them.

It might not seem that at first that working with an instant credit repair service is all that bad, but in the end it will be. Going into debt to a while, even though it might seem it did not, and getting out of debt will take some time too. Also, it will take some effort and cold hard cash to work out of it. The goal is to get out of debt, but staying out of debt in the future is just as important. Repeating the same mistakes over and over will be a never-ending cycle of poverty and stress. Learning how to manage money now is the overall goal for life.

Buying a new car or home is a thrill, just like getting a new credit card, but if credit scores are slashed by late payments or judgments there will not be many offers in the future. A lot of people do not realize how far reaching a negative credit score can be. Denial of insurances, mortgages, credit cards, loans for education, vehicles, checking accounts, rents are just a few of the ways that negative credit can hurt. The scammers are unscrupulous, and will use their tactics to get what they want money.

One of the first warnings to look for with a fast slick credit repair scammer is that they will not say that credit repair can be done independent of their company. Legal rights are never stated, a say that by phoning, emailing or writing the three major reporting agencies of Experian, Equifax and Trans Union is silly. Usually they promote the idea that the companies are only just reporting agencies, and they cannot remove any inaccuracies anyway, so there is no use in talking with them. It is true that the agencies can not get rid of any negative true reports, so this ruse will does work, but it is just a lead in to there next tactic of scamming.

Next, all scammers will advise that to get a good one over on the reporting agencies, and to land some new loans and credit extensions on credit cards, is to just apply with the federal governments IRS (Internal Revenue Service) for a EIN (Employer Identification Number). This is not legal for the ordinary Joe because it is creating a separate identity, and the Social Security number being used will no longer be used for identity purposes. New credit identities under false pretenses can get jail time and huge fines for trying it, and getting caught.

There are so many ways to get into trouble with creating a false identity. If caught, prosecution charges will include mail fraud because of the use of the federal post office system, or even fraud of any wire transmissions too. Lies on any type of loan backed by a financial institution backed by the federal government will make a lot of hot water, as well as using an EIN under false reasons. It is just not worth the chance to nor is it morally right to lie just to get credit issues resolved.

Another favorite game of scammers of instant credit repair services is to ask for payment upfront without providing services first. They will state that services to do the work do require time and effort, and that they have to pay their employees too. All kinds of reasons will be given for payment of front, but do not fall for any of them. These are fly-by-night companies that will be here today and gone tomorrow with the cash. Many of them require payment of large sums of money, from a few hundreds to thousands of dollars for their supposed services. The best way to solve credit issues is to consult with a credit counseling service to see how to really fix credit problems and to work hard at getting the debt paid off.

Avoid Credit Repair How to Keep your Nose Clean (and your Credit History too!)

Being smack in the middle of an attempt to repair a credit report isnt really a fun place to be. Fixing past credit problems takes time and dedication, and in some cases a complete change in how money is handled. This whole headache can be avoided by simply not allowing credit to spiral out of control in the first place.

There are lots of things that can harm a credit score. One of the most common negative items on credit reports are late payments. A person can have a squeaky-clean credit report and then miss one payment, and suddenly that credit report isnt so squeaky clean anymore. Being thirty days late on a bill, no matter what the reason, will show up on a credit report and drop the credit score down a few points. The notation of the late payment, by the way, doesnt disappear when the account is brought to current status. The history of that one late payment will haunt the credit report for years to come.

If so much fuss is caused by a single late payment it is easy to guess what multiple late payments will do. With every instance of a late payment, the credit score falls lower and lower. When a creditor looks at a credit report they can usually get a good feel for the persons likelihood of staying current with payments. The creditor will probably brush off the instance above with the singular late payment if its the only instance in an otherwise perfect report. Many late payments, especially those occurring at different times, will send a red flag to the creditor that this particular consumer isnt a safe bet. If creditors dont see an applicant as a safe bet then the consumer will not be offered the best interest rates available.

It isnt difficult to keep a credit report clean if you understand what items are seen as derogatory. Late payments are notated in varying degrees, depending upon the lateness of the payment. When a creditor looks at a credit report they can see if a bill was thirty days late or rather ninety days lateand there is a big difference. A single delinquency of thirty days suggests that the consumer simply forgot to pay the bill that month, but a few ninety-day delinquencies suggest a problem paying bills consistently. What is the moral of this story? Pay your bills on time, every single month. With all the bill-paying software available nowadays there really is no reason to allow forgetfulness to ruin your credit rating.

More is not necessarily better when it comes to credit lines. It is good to have a couple of open and active credit accounts to show prompt payment, but if a consumer has multiple credit cards open this puts up a red flag. Even if the cards have zero balances, the fact that there is available credit tips off the creditors that even though no money is owed on these balances right now, that may well change next week or the week after, affecting the consumers ability to pay. If all the credit cards are maxed out it is equally detrimental, if not more so. From a credit standpoint, it is best to carry only a couple of cards and to pay the balance off every month. If paying off the balance isnt feasible, then prompt payments are a must.

One other item, which many consumers dont realize is affecting their credit rating, is the number of inquiries on the report. Inquiries are notations at the end of the report, which list the creditors who have, by the request of the consumer, taken a look at the credit report. Every single time a person requests a line of credit, an inquiry is noted on the credit report. This list tells creditors a lot about the future spending habits of a customer. If the inquiry list is full of recent department store inquiries, a creditor may see this as a warning sign that the consumer is getting ready to wrack up some major debt. So think twice before filling out an application for credit. Rest assured that almost every financial move you make is notated somewhere, and can come back to haunt you if not managed well.