Increasing your credit score!
Seth Harris
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Reduce Balances: Credit balances affect your credit score by about 30%. Even if you’ve never missed a payment, if your credit cards are maxed, your score will drop.
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Never Close an Old Account: Credit history is a major factor for your score. Often, people feel that they should close account that they infrequently or no longer use. Wrong. This will actually lower your credit score because you are losing an account with some seasoning. Length of time on accounts is a positive factor. If you can’t resist the urge to spend on the card, cut it in half!
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Have Different Types of Accounts: Another method to help increase your score is to obtain various types of credit. You don’t need 10 credit cards but instead focus on other forms of credit such as an installment loan, auto loan, student loan, home loan, etc. The latter four loans are considered good types of credit because they usually carry lower, fixed payments with an estimated date of full repayment. Conversely, the credit bureaus know that a credit card payment can linger for years.
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Remove Late Payments: About 35% of your credit score is based on timely payments. The first thing you should do is call the creditor and make sure you’re up to date on all payments. If you were late on a payment, speak with an account rep and ask if they will remove that from your record. They are willing to do that for some clients.
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Only open new accounts when absolutely necessary: Opening a new account can temporarily drop your credit for 6-12 months. It’s not a huge drop but only open new trade lines/credit if you really need it. Stay away from the free T-shirt offers!
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Call every 6 -12 months to increase your spending limits on your good cards: By having a high available balance, you increase your score. Remember, just because you could charge it, doesn’t mean you should.
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Avoid too many credit inquiries: Mortgage and landlord checks do little to no damage as the bureaus don’t want you to feel prevented from shopping around. However, man consumer credit pulls can really start to ding your score.
- Avoid for-profit credit counseling services:
These companies will be listed on your report and that will lower your score.
Remember, you have the right to dispute any erroneous information on your report. A creditor has 30 days to respond and prove the charge is valid. If they do not respond the item has to be removed. There is a seven-year stature of limitations for an account with no activity. If you find an account on your report over seven years it has to come off.
For additional questions on credit or for real estate financing needs, please contact me at:
Seth Harris
IndyMac Bank
700 NE Multnomah Street, Suite 450
Portland, OR 97232
Direct: 971-563-7398
www.sethharris.com
