18 tips to boost your credit scores
They follow you everywhere in the financial world. Here's how to make sure yours are the best they can be.
This post comes from Angela Colley at partner site Money Talks News.
Much the way your final grade summarized your command of a course in school, your credit scores are the distillation of everything in your credit history. And those three-digit numbers can affect you in many ways, including interest rates you'll pay and the size of your insurance premiums.
Fortunately, credit scores aren't set in stone. In the video below, Stacy Johnson shares his best tips for raising your credit scores. Check it out, then read on for more ways to give your scores a boost.
Now let's flesh out Stacy's tips and add more:
You can dispute errors online through each bureau:
Some negative marks (like a foreclosure or tax lien) aren't going away, but collectors and lenders may remove charge-offs or collection accounts if you negotiate with them. Before you pay anything, write a letter to the creditor and ask to have the account removed or marked as "paid as agreed" in exchange for your payment. After the creditor agrees in writing to remove the negative mark, pay the balance. It's called "pay for delete," and Creditmagic has a sample letter you can use.
Use an old credit card. Credit card companies often stop reporting your account if you no longer use the card. Dust it off, use it to make a few small purchases, and the creditor will start reporting again. Doing so increases your available credit limit and your credit history length, since the old card is showing active again.
If you have only a credit card, add a small personal loan to the mix -- perhaps a signature loan from a credit union. Paid on time, blended credit boosts your scores.
Don't consolidate your credit. I once worked with a mortgage adviser who would tell customers to consolidate all of their credit card debt into one credit card and cancel the other accounts. That's bad advice. By closing cards, you shorten your credit history. And consolidating debt doesn't remove it. It only shuffles it around.
But there's an exception to this rule: If you're paying ridiculously high interest on one credit card, transferring the balance to a lower-interest card will save you money. But keep both accounts open if there's no annual fee.
More on Money Talks News and MSN Money:
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