How to Improve Your Credit Even if it is Excellent

When you apply for almost any type of loan, one of the facts that lenders will use to make a decision is your credit score, also known as the FICO score. The lender obtains this three digit number (it ranges from 300 to 850) from one of the three major credit bureaus (Trans Union, Equifax, or Experian). Calculated by a formula developed by a company called Fair, Isaac & Company (hence the name FICO), this score represents to a lender your credit worthiness. It not only influences whether your loan is approved, but it also influences your interest rate, other loan terms, and in some cases the amount of your car insurance.

There are many things that people can do to improve their score, even if it is excellent. The first and easiest thing to do is to make sure you do not close your oldest credit card or credit line. Make sure to use it every few months and pay it off immediately if possible. Also, make sure that you are using thirty percent or less of your credit limit. If you are using a higher percentage, ask your lender to increase your limit so that your percentage of credit used goes down. Try and use as few credit cards as possible. Stay away from all the offers in the mail to open up new credit lines. The more new accounts you open, the lower your FICO score. If you close accounts, that can impact your credit too. Because you now have less available credit, the percentage of available credit to credit being used will decline, lowering your credit score.

The best formula to improving your credit score is to make payments on time, keep your balances low, and to check your credit report for errors periodically. There is a new government web site that allows you to check your credit for FREE from each of the three major credit bureaus. You can access it from my web site at www.abhuta.com. On the homepage please click on the link on the left hand side that says - Free Annual Credit Report.

Amit Bhuta
Real Estate Helper
Kendall Village Homes
(305) 439-3031
www.DadeCountyMLS.com