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Improve your credit scores by 100 points

BOB KIEBER
special to the daily

If you have been reading my articles over the years, thank you, and you also know that I constantly write about credit scores. You know by now that the higher your credit score, the easier it is to obtain a mortgage, a car loan or a credit card. If your score is in the high 700 to low 800 range you can read on and feel good about what you have already achieved. If your credit score is 700 or below you should read on and learn few things that will help you bring that score up to a higher level.

1. Pay your past due accounts. This may be obvious, but by getting any past due accounts current your scores may not go up immediately. It will help in the score dropping any more. If the amount owed is small, I suggest that you pay off the account, and if the account will not be used again, close it.

2. Contact the creditors where you have had late payments. Be nice when you speak to them and maybe, just maybe, they will notify the credit bureaus and report the account was not late. This will not happen if you are still currently late on payments.

3. Request to have your credit limits increased. Let’s say you have a $5,000 credit limit on a MasterCard, and you have a current balance of $3,000. That is 60 percent of the credit limit and ideally you want to stay below 50 percent of the credit limit. If the creditor will increase your limit by $2,000 you now are below that fifty percent mark and your scores should increase. One note is that this does not mean you should charge more on the account.

4. Do not apply for any new credit. Having one or two credit inquiries over a six month period should not hurt your credit score. But if you apply for more than one or two credit accounts in a short period of time, your scores will suffer. Plus, if you already have a credit card or two, why do you need three or four cards?

5. Accelerate your higher interest rate cards to get them paid off as soon as possible. By doing so you will show less in balances and that always helps you scores. If you cannot pay them off soon you might want to consolidate them in to one account. Be sure to read #3 again.

6. Never make a late mortgage payment. One 30-day late payment on a mortgage can negatively affect your credit score as much as a bankruptcy would.

So there are six simple ways to improve you credit score or at least, keep it from falling. Remember that the computers that track your credit history only know you as a number. They do not correlate your income, how nice of a person you are or if you donate to local charities. They only see the numbers, good and bad ones. And the bad ones can drop you score like a rock. So be diligent and it will pay off in the long run.

Bob Kieber can be reached at (970) 262-1199 or at rkieber@comcast.net. He is a local mortgage lender and principal of Resort Lending.


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