Improving Your Credit Score
Are you one of the more than 30 million people in the U.S. with a low credit score (below 620)? Many folks in the Grand Rapids area have that problem.
Your credit score is a number derived from your credit report—the record of your financial behavior. It contains information about you and indicates how responsibly you have used credit and met your financial obligations.
A good credit record is very important. A low credit score could deny you access to a credit card, mortgage or car loan, insurance, electric and telephone service, an apartment rental unit or even a job. It could result in thousands of dollars in higher finance charges.
What's more, a poor credit record can follow you for years. Late payments, defaults and other flaws can generally remain on your credit report for up to seven years; a bankruptcy for 10 years; and unpaid tax liens for up to 15 years.
People with excellent credit files receive the best interest rates and payment terms from lenders. If you practice good credit behavior, you should have no problem securing credit.
Here are some BBB tips on how to improve your credit score:
· Review your credit report at least annually. Errors on your credit report could hurt your score. The law requires each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – to provide you with a free copy of your credit report, at your request, once every 12 months. Only one Web site is authorized to provide these – www.annualcreditreport.com. This is not one of the services that you hear heavily advertised.
· Pay your bills on time. While it may sound simple, many people let late payments hurt their credit score.
· Don’t ignore traffic tickets. Tickets and any other fines owed to local governments can end up marring your credit score.
· Keep your credit card debt and balance low. Aside from the impact credit card debt has on your score, carrying a large balance relative to your limit can hurt.
· Don’t have too many credit cards. New credit cards reduce the average age of your accounts and can have an adverse effect on your score.
Consider credit counseling. Credit counselors can help you get a handle on your debt. Just make sure you check out the organization with the BBB first. We offer free Reliability Reports on nearly three million businesses. To check, go to www.westernmichigan.bbb.org or call us 24 hours a day at 1-800-6 THE BBB If you have a problem, use our web site complaint form or mail us details at: BBB, 40 Pearl, N.W., Suite 354, Grand Rapids, MI 49503. Our office serves the Western Michigan area.