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Tips for Improving Your Credit ScoreMay 2007
Whether your credit is already good or could use some improvement, managing your personal finances in ways that enhance your creditworthiness is always smart. Adopting sound practices that enhance your credit score is a good place to start. The topic of credit scores has been in the personal finance news since credit reporting agencies began to make such scores available to consumers a couple of years ago. Of course, this event also opened the door to a number of Web-based companies that offer to provide your score and charge outrageous fees for what may be inaccurate information and for what you can get yourself for much less. The StraightTalk Report, “What is a Credit Score, and How Can it Affect Your Credit?” explains credit scoring and tells you how to get accurate info about your scores for a reasonable fee. My goal in this report is to share with you some simple tips that can help you keep your credit score and overall credit in good shape. That’s important in today’s challenging economic environment for individual consumers. Paying attention to your credit score is particularly important if you are contemplating purchasing a new home or vehicle that will require a loan. What’s a credit score?Your credit score is the three-digit number, derived by lenders from an analysis of your credit report, which compares your individual past and current credit performance to that of similar consumers. Lenders (such as banks, credit unions, credit card issuers, and retail merchants), insurance companies, and some landlords use credit scores as part of evaluating applications for credit. How often can individual credit scores change?Credit scores are not fixed; instead they reflect the individual consumer’s current credit experience, based on regular analysis of the changing information in that consumer’s credit report. That’s both bad and good news for you. Relatively frequent analysis by credit reporting agencies means that if you hit a financial hard patch and are late paying a few bills for a couple of months, then your credit score will probably drop. The good news is that good financial habits and practices can also improve your credit score in a relatively quick time. Tips from the experts for improving your credit score.The following tips represent a consensus from a number of financial experts, including those at the Federal Trade Commission and Fair Isaac Company, the organization who developed the most widely used models for credit scoring.
StraightTalk Tip: Following the practices that enhance your credit score, not coincidentally, can help you achieve overall financial well-being because they are cornerstones of good personal finance management. For More Information.The following excellent resources provide more in-depth information about credit scoring and credit repair.
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