How to Improve Your Credit Score

Credit is one of the largest factors influencing mortgage loans.  It is virtually impossible to raise your credit score "on the spot", but there are several strategies that will enable you to have the highest score possible when you apply for a mortgage.

Order a copy of your credit report annually.  Make sure all three national reporting agencies have accurate and current information.  Dispute any problems with your creditors.

Note: Theoretically, if a series of credit reports is requested on your behalf during a limited amount of time, your score will decrease. Due to changes in the law, "consumer-originating" credit report requests have less of an impact on your score than ever before. Requests in relation to a mortgage or car loan are not treated the same as a number of credit card requests. Credit bureaus, and lenders, realize that consumers request their own credit reports to stay informed, and smart consumers shop around for the best possible deals.

Unsolicited credit card offers don't negatively affect your credit report.  However, you can write to the three national reporting agencies and "opt out" to stop future unwanted mailings.

The two main components of your credit score are your payment history and the balances you owe on your open accounts. Bankruptcy filings and foreclosures, which can stay on your credit report for as long as 10 years, can also significantly lower your score. It's never a good idea to take on more credit than you can handle.

Late payments work against you. It's extremely important to pay bills on time, even if it's only the minimum monthly payment.

Don't "max out" your credit lines. Since the amount of the balances on your open accounts is a factor, lower balances are better.

By carefully managing your credit, it's possible to add up to 50 points per year to your score.