5 On Your Side

Tips for raising your credit score

Posted October 1, 2008

— Credit scores give potential creditors an idea of the likelihood of a person paying off a debt and the timeliness of those payments.

“It's the three-digit number that gives you sort of a snapshot in time of how a person has been handling credit,” certified consumer credit counselor Rebekah O’Connell said.

O’Connell said a good credit score can help a person get things like easier access to credit, lower interest rates and more.

“It affects your insurance rates. It may get you a better job,” O’Connell said.

If a person’s credit score isn’t what it should be, it can be improved, but the key is to start now. There is no instant fix for low credit scores, but over time, people can raise their scores.

First, O’Connell recommends getting copies of your credit reports and fixing errors. This should be done at least six months before a major purchase.

It is also important to pay bills on time. “Late payments drop your score like a rock,” O’Connell said. She warned that 35 percent of the credit score is based on whether a person pays on time.

Reducing credit card balances by living within your means can also do a lot to help bring up your credit score.

“Being maxed out or right up to the limit on your credit balances hurts your score. In general, you want to be under 30 percent of your available credit,” O’Connell said.

Keeping older accounts can also raise a person’s credit score by showing a history of how a person has used credit. Closing unused accounts right before applying for a loan can hurt a person’s credit score because the person will owe the same amount of money, but have less total credit available.

Finally, O’Connell recommends not opening new accounts.

“Multiple new accounts opened in a short span of time put you at greater risk of not being able to pay back these loans, therefore your credit score reflects that you might be at greater risk because of these new accounts,” O’Connell said.

The three-digit credit score can pack a lot of financial punch.

“It's wide-ranging. A lot of people are checking credit reports and credit scores,” O’Connell said.

A few things that do not impact a credit score are race, marital status, age, occupation and salary.

How to get your credit report

Each consumer is entitled to one free report per year from each of the three credit-reporting companies.

AnnualCreditReport.com is the only way to get a truly free credit report regardless of what some advertisements say. Going through that Web site allows you to choose which agency to get your free credit report from:

Experian – 888-397-3742
TransUnion – 800-916-8800
Equifax – 800-685-1111

After your one free report per year, credit scores are not free. Each credit reporting company also has its own score.

The best advice is to alternate agencies every four months.

Correcting errors

  • A dispute must be done in writing
  • Include copies of relevant paperwork along with a copy of the credit report with the disputed item circled
  • The reporting agency has 30 days to investigate
  • If you ask, credit reporting agencies must send correction notices to anyone who received your report from them in the past six months.
  • Dispute the item with the creditor, too

Credit scores are based on

  • 35 percent - payment history
  • 30 percent - amounts owed
  • 15 percent - length of credit history
  • 10 percent - new credit
  • 10 percent - types of credit in use

Credit experts answered your questions on Oct. 1, 2008.


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  • hopelessillegals Oct 3, 2008

    WRONG!!!! After 7 years the debt is no longer valid and is no longer due to the creditor

    They can renew the account as long as they want, possibly for the rest of your life if they choose to. Judgements can be renewed every 10 years. In the credit crunch, expect more of them to renew and renew those bad accounts

  • MojoGal Oct 2, 2008

    I've been looking at various options to help monitor my credit (not purchasing yet! I'm cheap.) Researching, I can't find the answer to one question. Why do I have to pay to see my personal information? It's my credit, my score. You apply for a loan, you pay the lender to pull a report. You want to know your FICO, you pay. I don't get it and don't like it.

  • Tom Morrow Oct 2, 2008

    "WRONG!!!! After 7 years the debt is no longer valid and is no longer due to the creditor!"

    Uhhh... hm. That doesn't sound right... I have an idea! I think you should put that to the test and get back to us in 7 or 8 years, let us know how that "borrowed money isn't valid after 7 years" thing is going for you.

    Ready? GO!

  • 1 of the original Americans Oct 2, 2008

    WRONG! It will only drop off 7 years AFTER you have PAID IT OFF. If you still owe a balance the creditor can keep putting it on your credit report, until you pay it

    WRONG!!!! After 7 years the debt is no longer valid and is no longer due to the creditor!

  • hopelessillegals Oct 2, 2008

    magicbus, let me clearify, I was referring to collections and charge-offs. You are correct when referring to normal credit accounts. And even with collections and charge-offs, if the creditor keeps reporting, it will always be a resent account. by the way, as credit gets tighter, they will report more and more often on those accounts to help themselves collect.

  • hopelessillegals Oct 2, 2008

    Anyone know what the maximum score possible? Thanks. 830 on a FICO score

    Actually it is 850. I currently hold a 838 FICO, so the above info is clearly wrong

  • hopelessillegals Oct 2, 2008

    I just went through the webiste provided by WRAL and Equifax said it was going to be $7.95...that's not FREE as stated WRAL!

    AnnualCreditReport.com is free for the report, all others charge for that. everyone charges to get your scores though.

  • keepitreal Oct 2, 2008

    Maximum credit score of the FICO scoring model is 850.
    Maximum credit score on the Advantage scoring model is 950.

  • keepitreal Oct 2, 2008

    legal immigrant- you missed the point completely. If the credit market for consumers freezes this may very well happen. What do you think freeze means? No more credit for anyone. This action would have nothing to do with you individually, it would have to do with the availability of money. This can happen to anyone at anytime.
    What do you think it means when the news tells you it is getting harder to get and keep open lines of credit for the most highly qualified borrowers? It means they can't lend money they don't have no matter what the qualificaitons.

    Its time to face reality that this could come to main street america.

  • 68_polara Oct 2, 2008

    Thanks legal immigrant!