Your Goal This Year: Raise Credit Score

Credit granting policies seem to be getting tougher in these days of the credit crunch, so one of your tasks to implement regularly should be to raise your credit score. Most people do not think about their credit score frequently or regularly, but not doing anything about it, year after year, is undoubtedly one of the worst things you can do.

This is especially true for mortgage loans. It was not all that long ago when you could get approved for a very attractive mortgage loan with zero problems. But increasing your credit score is also important for other types of credit that you probably have, like car loans, credit cards, bank loans, and more.

The big reason it is critical to have your credit score as high as possible is that virtually all lenders for any kind of credit will look at your credit score and credit history so they can make an intelligent decision as to how much of a credit risk you represent to them when they consider your loan request. The rates and incentives they will offer is very dependent on how much of a risk they think you represent to them, and that risk factor is determined for the most part by your credit score and credit history, as reported by the credit bureaus.

As an example, consider a typical mortgage loan, which probably amounts to a six digit figure for the majority of mortgage holders these days. The difference of about 20 points in your credit score can make the difference between getting a rate that might be as little as a tenth of a percentage on the mortgage loan. So what you say? Over the life of the loan, those tenths of a percent can add up to more than $10,000 which is money that could be in your pocket if you had taken the time to raise your credit score before applying for the loan.

With regard to your credit score, there are some things listed on your credit report that you have zero control over, such as the amount of your income. You also have no control over the total amount of your outstanding debt, but here is where it gets dicey. The actual amount of your total outstanding debt may not be correct on your credit report.

In addition, the status of each of your financial obligations may not be accurately reflected either. Multiple studies have found that the majority of consumers have one or more errors in their credit report. These errors run the gamut of having accounts listed that do not belong to you, which is common for people with common names. It may have a debt reflected as being past due when it really is completely up to date. It may have your balance listed as $8000 when in reality your balance on that account is $80. All of these errors compound into producing a credit score for you that is lower than it should be if things were reported accurately.

Your first step in raising your credit score is to get a copy of your credit report and credit score from each of the three major credit reporting agencies. Examine them with a fine tooth comb and then start an official dispute with the credit bureau for anything that is not completely accurate. The credit bureau has an obligation, dictated by law, to either verify the information as correct, or correct it, or sometimes even remove it.

Take steps so that you do not become a victim of your own credit score. Invest the time to raise your credit score and make it a regular part of your standard financial responsibility tasks. The money you will save will serve a much better purpose in your own wallet than it will being paid out in loan payments.

Article Source: http://www.share.onlypunjab.com

For more insights and additional information about how you can Raise Credit Score as well a getting free copies of your credit reports, please visit our web site at www.credit-help-center.com

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