What Activities affect Credit Score/Rating? What is Credit Score? Improve your Credit Score

What is a credit report?

A consumer credit report is a factual record of your credit activities. It reports all your credit accounts and outstanding loans, the balances on your credit cards and loans, and your bill paying history.

Essentially, it's a promise to pay in the future in order to borrow in the present. The higher your credit score number, the better chance you have of getting approved for a bigger loan in the future. Generally speaking, a credit score measures the likelihood you'll repay what you owe, and it is based on information in your credit report

Many factors affect credit score.

Pay your bills on time. This can be tougher than it sounds when you're living paycheck to paycheck, but it's perhaps the most important thing you can do to keep your credit strong. Even if you can only afford the minimum payment for awhile, it's vital to avoid late or missed payments.

Don't open any credit lines you probably won't use. For example, don't open a lot of store credit cards just to get the initial 10 percent discount.

Contrary to what you may have heard, don't close old, paid-off accounts. Credit companies used to advise people to close old credit cards they were no longer using. But closing these cards shortens your credit report and makes you seem less credit-worthy.

Avoid bankruptcy. Declaring bankruptcy is one of the worst things you can do for your credit score. It may seem like the easy way out in the short term, but over time it will cost you tons in the way of high interest rates.

Overall, keep in mind that negative items on your credit report are a lot more powerful than positive items. A late payment can affect your score in a month or two, while making payments on time can take six to 12 months to improve your credit rating.

Order copies of your credit report from Equifax, Experian, and Trans Union. This is such a simple step, but many people never do it. If you're going to have any hope of improving your credit, you need to know what you're up against.

When a party performs a credit check, this can hurt your credit score. If you are shopping for loans, its good to shop within a 2 week's period. They group all the activities (credit check) as one activity. Soft check does not affect your credit score.

1. Know and Track Your Credit Score (be sure to sign up for the free trial of your credit score monitoring listed on the article below. It really helped my get my score up.)
2. Never Miss a Payment, Starting Today
3. Never use more than 20% of your Available Credit
4. Keep Credit Cards that Have No Annual Fees Open For as Long as Possible
5. Extend Your Credit Limit on Cards You Already Have before You Get New Ones
6. Get Credit Cards that Have CashBack Rewards to Contribute to your Balance
7. Transfer Your Balance to a Credit Card with a Lower Interest Rate and a Higher Available Credit-
8. If You Think You Are Going to be FORCED to Pay a Bill Late Ask for an Extension or Payment Plan
9. Take out a Small Personal Loan and Repay it Over a Year
10. Ask Someone With Good Credit if They will Account Shadow you

Your Credit Score (also known as your MyFico score) is calculated with the following breakdown"

* 35% - Payment History
* 30% - Credit to Debt Ratio
* 15% - Credit History
* 10% - New Credit
* 10% - Credit Types in Use

All of these factors affect credit score.

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