Real Estate Success Link

If your credit is less than perfect you will need to work on improving it.  This process isn’t something that you can do overnight – so forget the promises of cleaned up credit in 24 hours – it will take a bit more time.

One very large step that you can take to start improving your credit is to make all of your payments on time.  Paying your bills on time is very important and carries a 35% ranking on what your credit score is.  If you do end up paying late and it gets on your credit report these could stay on there for as long as 7 years.  So step one in improving your credit score is to pay ALL bills on time.

The next item that needs to be looked at in improving your credit is how much you owe in relationship to how much available credit you have.  If you have a $5,000 limit on a credit card and you owe $4,500 this will have a negative impact on your credit score.  If you can keep your usage down to 30% or less it will look better on your credit report.  So if you have accounts that are over this at this time work really hard on paying them down and then staying at a lower balance than your limit.

Another factor that plays a part in your credit rating is the age of your accounts.  If you have accounts that you have had for a long time DO NOT close them, doing so may negatively impact your score.  Also if you have a lot of new accounts this may be a red flag to lenders so try not to open a lot of new accounts.

Another thing that you want to watch out for is the number of inquiries on your credit report.  These typically show up when you are applying for credit and are often a flag to lenders if you have too many.

As you focus on cleaning up your credit you will want to do a few things.  The following are some steps you may want to take:

1)      Get a copy of your credit report.  You can get a FREE copy at https://www.annualcreditreport.com

2)      Review any accounts that are showing late pays – once you have done this make sure you are paying these on time

3)      Review any accounts that you owe 30% more of what your limit is and begin paying them off

The following are items that you need to do to start improving your credit moving forward.  There are things that can be done as well to clean up the past negative items and those will be discussed in a future article.