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Raise Credit Score - Understand the System

Learn 2 easy tips to improve your credit score. Learn what factors are weighed heavily when you credit score is calculated.

Raise Credit Score - Understand the System

If you are cleaning up your credit report then you understand the importance of your credit score. Your credit score can impact your lifestyle more than by how much money you make.

With a bad credit score you may be having employers turn you away from a job. You may be unable to purchase a home or get approval for an auto loan or a credit card. On occasions when you are approved it is at sickening interest rates.

However if you can learn how the credit system works then you can use it to your benefit. You can create a higher quality of life for yourself and your family without earning any extra income.

When the credit bureaus calculate your credit score they use an algorithm. They plug in your information including payment history, types of accounts, balances, ect., and then a computer calculates your credit score.

This three digit number is the yardstick by which employers, lenders, and others see your creditworthiness. In fact, most new credit transactions a lender never looks at anything other than your credit score. You are judged solely by this number.

Let us discuss how to use this system to your benefit. There are two things that carry more weight in the credit system algorithm than any others.

1. Delete negative inaccurate accounts. Derogatory credit items do the most damage to your score and should be removed as soon as possible.

2. Maintain an unsecured revolving line of credit. This is an easy technique that almost anyone can do.

The actual credit bureaus algorithms are protected and not released to the public. However upon review of thousands of credit files it has been found that having an open account is almost as important as removing negative credit items.

The reason an unsecured revolving line of credit helps your credit score is because:

1. A credit line adds a trail of positive payment history. The credit bureaus also like to see an account that is aged.

2. Improves your debt to credit ratio. The credit bureaus reward people who have high available credit and low outstanding debt.

This credit line will carry more weight if it is unsecured such as a car loan or credit card. However if you are unable to get approval, then you should consider a secured credit card or a secured loan.

A credit line will help build credit however it is most important to remove bad credit items. If you are unable to get approval for new credit immediately and don't want a secured credit line then remove bad credit and then reapply.

By removing bad credit items and building creditBusiness Management Articles, you can achieve a 700 credit score and enjoy a better quality of life for you and your family.

Article Tags: Raise Credit Score, Credit Score Understand, Raise Credit, Credit Score, Score Understand, Credit Card, Credit Bureaus, Credit Items, Credit Line

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To get a free credit repair letter to use in removing negative items or to learn how to proceed with an equifax dispute visit us.

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