Business & Finance Credit

How to Build a Good Credit Score and History

More and more lenders, employers, landlords and insurance companies are checking your FICO score as part of their process of approving your loan, landing a job, having your own house to live, or good rates given for any type of insurance that you may have applied for. To attain all of these things that you are dreaming of accomplishing building a good credit history is the first thing that you need to do if in case you got one with a bad history.

Credit scores start from a low 300 to the cream of the crop 850. A regular consumer has a credit range of 600 to 700 but some may have more than this. A FICO score is the basis of most lenders and credit bureaus of computing your creditworthiness. A good credit score falls on an average of 720 and above. Where does one get the information on their respective credit scores? By law this is given for free once a year coming from the three major credit bureaus: Equifax, Experian and TransUnion. Your scores and credit history shows your current and closed accounts as well as your payment history.

Lenders do usually take a look on your credit history as the basis on whether they will grant your loan at a good interest rate or deny this altogether. If right now you are interested on applying for a mortgage that necessitates a high credit score then it would be best to apply for FICO score monitoring which usually gives you an update on your scores on a weekly basis. Subscribing to this online service alerts you when you have reach your high score goal as long as you setup a threshold for it. Some would go as far as sending you an sms to alert you when your scores have change for the better or for the worst.

To help you build a better credit score and history here are some simple guidelines to follow:

• Request a copy of your credit report as needed if not wait for it once a year but do monitor your history for any errors. If you see discrepancies then you can dispute them by going through your reports thoroughly.
• Pay your bills on time. Add some more on the minimum amount that you usually pay since this would cause your credit score to rise and would be noticeable for most lenders that you are a good borrower because you pay on time and is sincere in settling your bills.
• Avoid maxing out on your credit limit. This will surely cause your credit scores to drop that fast.
• Cancel credit cards that you are not using or do not need and pay on time for your credit card bills.
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