Boosting That Credit Score

Luckily for us, we can get our credit report absolutely free 3 times a year. Many times, people will get all three of their free credit reports at once. The smart thing to do would be to access 1 free report from 1 bureau every 4 months. After a year you’ll have gotten all 3 credit reports for free. But because we spaced it out, you can keep a better eye on your credit as events change.

All 3 credit reporting bureaus are required to give you one free report every 12 months.

You get them from AnnualCreditReport.com. Some people confuse this with FreeCreditReport.com which isn’t always free, so be careful. (Note: FreeCreditreport.com's link is to their funny Vids)

Once you have knowledge of the credit score game, your score can start climbing rapidly. But, it won’t budge an inch if you don’t first find out what’s on your credit report.

Now that you’ve got your report...

It’s time to see what’s on it and what we can do to fix it.

Your credit report will give you facts about the last 7-10 years of your credit history. This includes late payments, debt defaults, collections and even who has checked your credit recently.


Roughly, our credit score is weighted like this...

* 10% by Recent Credit Approval: Believe it or not, getting approved to borrow more money can actually raise your score... and make it easier for you to borrow even more! But only up to a point - too much credit available will eventually lower your score.


* 10% by Types of Credit Used: You can raise your score by using multiple types of credit. If you just stick with a credit card, your score will be lower than it could be.


* 15% by Length of Credit History: If you open a credit card account, plan to keep it active for 4-10 years. Accounts that are quickly shut down will lower your score, while older accounts will give it a boost.


* 30% - Debt to Credit Limit: Each open credit account should report to the bureaus once a month. The bureaus then look at your total debt from all accounts and divide it by the total credit available to you. This gives you a percentage called the Debt-To-Limit ratio, and if it’s over 33% you’re going to see your score lowered. 

* 35% - Payment History: Late payments and delinquent accounts hurt, even if your account is currently all caught up. If you’ve been 30, 60, 90 or more days late paying anytime in the past 7 years, then it’s going to lower your credit score. The more recent the mark, the worse it is. Debt defaults, collections and bankruptcies also hurt you here.