8/20/2012 2:15 PM ET|
9 fast fixes for your credit scores
Some of the stuff that you typically shouldn't worry about includes:
- Various misspellings of your name.
- Outdated or incorrect address information.
- An old employer listed as current.
- Most inquiries.
If the misspelled name or incorrect address is because of identity theft or because your file has been mixed up with someone else's, that should be obvious when you look at your accounts. You'll see delinquencies or accounts that aren't yours and should report that immediately. However, if it's just a goof by the credit bureau or one of the companies reporting to it, it's usually not worth sweating.
- Accounts you closed listed as being open.
- Accounts you closed that don't say "closed by consumer."
Closing an account can't help your scores and may hurt them. If your goal is boosting your scores, leave these alone. Once an account has been closed, though, it doesn't matter to the scoring formulas who did it -- you or the lender. If you messed up the account, it will be obvious from the late payments and other derogatory information included in the file.
4 common credit mistakes
Other actions to beware when you're trying to improve your scores:
- Asking a creditor to lower your credit limits. This will reduce that all-important gap between your balances and your available credit, which could hurt your scores. If a lender asks you to close an account or get a limit lowered as a condition for getting a loan, you might have to do it -- but don't do so without being asked.
- Making a late payment. The irony here is that a late or missed payment will hurt good scores more than bad ones, dropping 700-plus scores by 100 points or more. If you've already got a string of negative items on your credit reports, one more won't have a big impact, but it's still something you want to avoid if you're trying to improve your scores.
- Consolidating your accounts. Applying for a new account can ding your scores. So, too, can transferring balances from a high-limit card to a lower-limit one or concentrating all or most of your credit-card balances onto a single card. In general, it's better to have smaller balances on a few cards than a big balance on one.
- Applying for new credit if you already have plenty. On the other hand, applying for and getting an installment loan can help your scores if you don't have any installment accounts or you're trying to recover from a credit disaster such as bankruptcy.
By the way, all these suggestions work best if you have poor or mediocre scores to begin with. Once you've hit the 700 mark, any tweaking you do will tend to have less of a positive impact.
And if your scores are in the "excellent" category, 760 or above, you'll probably be able to eke out only a few extra points despite your best efforts. There's really no point, anyway, since you're already qualified for the best rates and terms. Here's one area where it's really OK to rest on your laurels and worry about something else.
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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I really need help increasing my FICO ... Problem is I have NO credit . I paid cash for my house, cars and everything else I need . So last year it was over 700 . Now it's 593 ??? I've checked and can't even get a gas card , I tired to get a home equity loan for $20,000.00 to get some credit reporting going but was denied .. My home value is $250,000 in a demanding/home market . My income can more than support my request..... I was looking forward in up-sizing my home within the year.
HELP Don't know what to do ??? Where to go for advise without paying a stupid fee .... I have to laugh that a son has horrible credit and owes lots and his score is higher than mine.
What the heck is wrong with this system ???? Also, none of my monthly bills are being reported like: Comcast - att - Verizon, utility company, hoa , insurances etc ???????????
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