Monitoring your credit history and keeping a close eye on your report is just as important as maintaining a good credit rating. Credit ratings factor into loan approvals and interest rates and the information on your personal report affects credit scoring. Anyone interested in a building a strong credit profile should review their file periodically and practice good financial habits.
Self Check-ups
Checking your own credit report is one way to monitor your report and improve your credit score. Because the information on your report plays a role in your score, watching your report carefully for signs of fraudulent activity or creditor mistakes helps keep your report in good shape. Annual Credit Report is the authorized online resource for free credit reports. Request a free report so you have access to all three of your reports from the three credit bureaus. You can order one free report yearly.
Credit Report Monitoring
Because Annual Credit Report only allows one free request a year, consider signing up for a credit report monitoring service that tracks your credit activity for as long as you're a member. Someone can get a hold of personal information and apply for credit in your name. With a monitoring service, you will receive e-mail notifications if someone submits a credit application using your name and Social Security number.
Payment History and Debts
Repairing your credit involves knowing what factors into your credit score and making improvements in these areas. According to Myfico.com, your payment record makes up 35 percent of your rating, whereas your debts make up another 30 percent of your rating. Improving these two factors can significantly increase your present credit rating. Start paying bills on time and devise a plan to bring down balances on credit cards.
Other Factors that Influence Credit
Payment history and the amount you owe aren't the only two factors in credit scoring. Factors such as length of credit history, types of credit and credit inquiries also influence your score. There's no easy fix for a short credit history (15 percent of credit score) and improving your credit in this area calls for keeping older accounts open and allowing time to pass. With regards to credit inquiries (10 percent of credit score), keep credit applications to a minimum. Don't apply for retail charge cards or loans unless necessary. For example, if you only have one type of credit, branching out and acquiring another type of credit can help your score because diversifying credit makes up 10 percent of your credit score.
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