Like to Improve your Credit Rating?

Your credit score is a three-digit number between 300 and 850, generated by a mathematical algorithm (a mostly secret formula) based on information in your credit report, as compared with information on tens of millions of other people. The number is said to be a highly accurate prediction of how likely you are to pay your bills. If it sounds boring and unimportant, you couldn’t be more wrong. Credit scores are used extensively these days. If you rent an apartment, get braces, buy cell phone service, apply for a job or call to get utilities connected, there’s a good chance your score will be pulled.

If you have an existing credit card, the issuer is likely to look at your credit score to decide whether to decrease your credit limit or charge you a higher interest rate. The higher the number the better you look to lenders. People with the highest scores get the lowest interest rates. And, we hear, they’re getting the jobs. Fair Isaac, the company that created the FICO scoring formula, gives us the following ways to improve our credit scores: Pay your bills on time. Paying late or letting something go to collection can have a major negative impact on your credit score. If you have missed payments, get current and stay current. The longer you pay your bills on time the better your credit score. Be aware, however, that paying off a collection account or bringing an account current will not remove it from your credit report. Look by paying your bills on time you avoid the hassle of late fees, over draft fees and negative reports on your credit report. Its much easier to stay on top of something then to try and climb out of a hole later on!

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