How To Raise Your Credit Score

If you've been told you need to raise your credit score, there's no reason to be discouraged. The credit agencies that track your bill - paying history to create credit scores continually update their records - and are legally obligated to correct any errors they contain. If you've formed bad financial habits, improving your credit is not something that will happen overnight - but within 12 months you can make a lot of progress to raise your credit score. By following the tips below and applying self - discipline to your financial and spending habits, you should be able to improve your credit rating. There are many things you can do to raise your score, beginning with getting educated about what your credit score means.

Check your credit report

The first step to raising your credit score is to check your credit report. Thanks to the Fair and Accurate Credit Transactions Act (FACT Act), U.S. residents are entitled to one free credit report a year from each of the three major U.S. credit reporting agencies - Equifax, Experian and TransUnion. For the credit report to be free, it must be ordered by:

• Going online to www.annualcreditreport.com; or
• Calling 1-877-322-8228; or
• Completing the form in the Annual Credit Request brochure and mailing it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281
• Learn how you can monitor your credit and get your credit score by visiting www.CountrywideCredit.com.

If you've been turned down for a loan, credit card, insurance policy or job due to a negative credit report, you're also entitled to a free credit report from the credit bureau that issued the report and remember, even if you have been turned down, you have a right to obtain a copy of your credit report through the creditor who pulled your report.

Mistakes or inaccuracies on personal credit reports are common, so check your report carefully. If you pick up any mistakes, report these in writing to both the lender and credit reporting agency, along with any supporting documents you have. Be sure to send all written communication via certified mail to ensure you are able to prove the credit reporting agency received your request to correct erroneous information. An agency's obligation to investigate your claim only begins upon their receipt of your complaint. And be sure to follow up until the correct information is reflected on your credit report.

Pay bills on time

Late payments or bill collections have a major negative effect on your credit score. Using an automated bill payment service from your bank account is a good way to pay your monthly bills on time. If you're having trouble making payments due to a financial problem, call the companies you owe money. Most are happy to work with you to arrange a payment plan. The worst thing you can do is not pay - and not call.

Reduce your debts

Try to keep the amount you owe as low as possible, especially on credit cards, since high loan balances can be harmful to your credit score. If you're using all the credit available to you, this could reflect poorly on your credit score.

Consolidating your debts with a debt consolidation loan might be a good option if you have large balances on credit cards with high finance charges. This might allow you to reduce your overall effective interest rate, pay off and close high-priced credit lines and make monthly payments on time because you have fewer due dates to remember.

Use credit cards responsibly

Having a few credit cards and making regular payments on time is good for your credit score. It displays that you're reliable and not relying too much on credit for your financial well - being. So if you don't have credits cards or aren't using them, it's a good idea to get and use one or two and pay them off monthly.

If you hit or are near the limits on your credit accounts, it's not advisable to open additional credit card accounts just for the sake of making your credit usage look more conservative. If you try this as a short term way to improve your credit rating, that strategy can easily backfire and lower your score. Instead, try to keep your credit card balances as low as possible and make sure to make payments on time. You can also call your existing credit card company to ask for a credit line increase - but then make sure you stay well below the new limit.

Need more tips?

If you would like more information, call Countrywide Bank’s Full Spectrum Lending Division now at 1-800-909-8217. Our helpful Home Loan Consultants are standing by to assist you.