CREDIT RATING continued

                           CREDIT SCORES

Experian, Equifax and TransUnion. All three credit bureaus calculate their own credit score and they all are different. The lenders will use an averaging of these scores to evaluate your standing. (This is changing since the three bureaus and federal government agencies are working to establish a single up front office that will be a go between from the private bureaus to the public, issuing a single composite report and score.)

Your score can be anywhere  between the high 300’s and the low 800’s. Sometimes mortgage lenders will not even consider a score below 600. Some factors affecting your scores:

• Public records, such as tax liens, judgments, or bankruptcies
• Short credit history
• Delinquencies
• Balances on revolving credit are near the maximum limits
• Too many or too few revolving accounts
• Too many accounts opened within the last twelve months
• Whether you make your payments on time

Increasing your scores. You can increase your score by a significant amount in a few months; 50 points  in a half year.

• Pay your bills on time. Even utility bills. Just one late payment can drop you by as much as 100 points.
• Pay early. Pay your card bills before the next statement date.
• When you pay  a day or so in  advance,  the creditor reports zero balance to the bureaus, bringing your credit utilization as low as possible and this is good.
• Fix mistakes. If you notify a credit bureau of a mistake on your report, it will  investigate by getting  in touch with the lender to verify that the information is accurate. If the lender can not say it is, then the information is removed.
• Pay down your cards. Reaching the top limit of your card does hurt you.
• Increase your limit.  Having a  high limit  and low  balance  will lower your credit utilization ratio and this is good.
• Hang on to old cards. A part of the score is based on how long you have had credit, including the age of your oldest card.
• Use these old  cards ocassionally.   If you do not use a credit card for more than six months, the creditor may start reporting the account as inactive. Then it will not be factored into all the score formulas.

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