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Keeping Your Credit Score High
Jul 15, 2004

Creditors use a system called credit scoring to help determine your creditworthiness. Utilizing information collected from your credit application and your credit report, creditors use statistical programs to compare your information to the profiles of similar consumers. These scoring systems award points for every factor that helps predict your creditworthiness, or how likely it is that you will repay the loan.


Companies may use a variety of credit scoring systems, but common factors they may consider include: your payment history, the total amount of debt you owe, the "maturity" or length of your credit history, the types of credit in use, and the number of recent credit inquiries on your file.

The best way to improve your credit score is to pay your bills on time, pay off any outstanding balances, and not acquire any new debt. Improving your credit score takes some time, so be patient.

Why should you stay informed about your credit?

Your credit history and credit score might affect decisions regarding loans, interest rates, and employment.  Check your credit score.

You can ensure the accuracy of your credit file and dispute any inaccuracies which may be damaging your credit score.

At any time your credit history may change, resulting in changes to your credit score. Discrepencies in your credit report may provide early warning signs of identity theft.

You're the most qualified person to detect and contest inaccuracies, or verify the accuracy of your report.

How can you improve your credit worthiness?

Pay your bills on time, all the time - This proves your responsibility and assures creditors that you are a consistent and reliable consumer.

Watch your amount of outstanding debt - Optimally, your account balances should be below 75% of your available credit.

Watch your amount of available credit - Many accounts with high credit limits may concern lenders, who believe that access to too much credit could result in debt problems in the future. Get low apr credit cards.

Keep credit inquiries to a minimum - Excessive inquiries imply that you have been seeking credit with various lenders, and may give potential lenders the impression that you are experiencing financial difficulties.

Know what your credit report says about you - Regularly check your credit report and dispute any inaccuracies.

Be patient - it will take time to improve your credit history.

Related Article: Your Credit is Your Financial Reputation >>