A borrower's credit score is a direct reflection of his past and current credit history. A lender uses that credit score to determine a borrower's ability and willingness to repay new debt. With a few simple fixes, a borrower can quickly improve his credit score prior to applying for a new debt.
Check Report for Errors
Pull a copy of your credit report. A free one can be obtained from AnnualCreditReport.com. Check your report for errors and immediately report any to the credit bureau through the website. Make sure to check all three bureau's reports, TransUnion, Experian, and Equifax. Remove any erroneous information to help improve your score.
Pay Down Credit Card Debt
A credit score is made up of numerous variables, one of which is credit utilization. To bring your score up, lower your credit utilization. Pay down your credit cards to less than 30 percent of the credit limit to quickly raise your credit score.
Avoid New Credit
In the months leading up to applying for a new loan, do not allow another lender to check your credit to prequalify you for a purchase or new debt. Also, do not open a new debt or line of credit. New items on your report, as well as credit inquiries, will bring your credit score down.
Keep Trade Lines Open
Do not close any old or unused debt. This shortens the length of your credit history and lowers your credit score. Keep all trade lines that are open until you acquire the new debt.
Pay Off Negative Items
Pay off any negative items on your credit report, such as collections, judgments, liens or bankruptcies. The lender may require these items to be paid in full prior to closing on the new debt. These items have less of an impact on your score if paid in full.
0 comments:
Post a Comment