Once you have your credit report and your credit score, you will
be able to tell where you stand and where many of your problems
lie. If you have a poor score, try to see in your credit report
what could be causing the problem:
-Do you have too much debt?
-Too many unpaid bills?
-Have you recently faced a major financial upset such as a bankruptcy?
-Have you simply not had credit long enough to establish good
credit?
-Have you defaulted on a loan, failed to pay taxes, or recently
been reported to a collection agency?
The problems that contribute to your credit problems should
dictate how you decide to boost your credit score.
When you seek professional credit counseling or credit help,
counselors will generally work with you to help you develop a
personalized strategy that expressly addresses your credit
problems and financial history.
When developing your action plan, know where most of your credit
score is coming from:
1) Your credit history (accounts for more than a third of your
credit score in some cases). Whether or not you have been a
good credit risk in the past is considered the best indicator of
how you will react to debt in the future. For this reason, late
payment, loan defaults, unpaid taxes, bankruptcies, and other
unmet debt responsibilities will count against you the most.
You can’t do much about your financial past now, but starting to
pay your bills on time - starting today - can help boost your
credit score in the future.
2) Your current debts (accounts for approximately a third of
your credit score in some cases). If you have lots of current
debt, it may indicate that you are stretching yourself
financially thin and so will have trouble paying back debts in
the future. If you have a lot of money owing right now - and
especially if you have borrowed a great deal recently - this
fact will bring down your credit score. You an boost your
credit score by paying down your debts as far as you can.
3) How long you have had credit (accounts for up to 15% of your
credit score in some cases). If you have not had credit
accounts for very long, you may not have enough of a history to
let lenders know whether you make a good credit risk. Not
having had credit for a long time can affect your credit score.
You can counter this by keeping your accounts open rather than
closing them off as you pay them off.
4) The types of credit you have (accounts for about one tenth of
your credit score, in most cases). Lenders like to see a mix of
financial responsibilities that you handle well. Having bills
that you pay as well as one or two types of loans can actually
improve your credit score. Having at least one credit card that
you manage well can also help your credit score.
As you can see, it is possible to only estimate how much a
specific area of your credit report affects your credit score.
Nevertheless, keeping these areas in mind and making sure that
each is addressed in your personalized plan will go a long way
in making sure that your personalized credit repair plan is
comprehensive enough to boost your credit effectively.
Source: http://www.ArticlePros.com/author.php?Tellme
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