To be able to judge what's good or bad credit, you could study thousands of credit reports.
Or you can get free credit scores. Instead of relying on someone's opinion of how good your
credit is, a credit score give you a mathematically precise result. So for a quick and easy
view of your credit, free credit scores are the answer.
The use of credit scores grew out of need to have a fast and accurate way to judge a person's
credit. Using the information from hundreds of thousands of credit files, various factors were
found that predicted how reliably a person would repay a debt. Scoring models were then created
using these credit elements to give a single number grade of a person's credit. And when you get
free credit scores you get an instant unbiased view of your credit.
Unless your credit is perfect, after you get free credit scores you'll find one or more areas
of your credit that could use improvement. Creditors use different formulas to create their
scores, but they tend to use the same types of credit information. And once you know the sources
of possible credit weakness you can act to improve them.
Typically free credit scores grade your credit by analyzing five areas of your credit report.
The scores look at how long you've had credit, how much debt you have, how you've repaid your
debt, your recent account activity and the variety of credit you have.
And even though there are no quick fixes for improving free credit scores, there are some
basic ideas to keep in mind:
- The longer your history of managing debt the better. Scores rate older accounts higher
than similar new accounts, so close new accounts before older accounts.
- Credit scores rate debt that's close to your credit limit as negative. Paying down your
short term debt, like credit cards, can raise your score.
- It's important to have your account payments current, especially those that are recent or
large.
- Establishing credit is a gradual process, so don't take on several new accounts at once
or you'll be seen as possibly becoming overextended and rated negatively.
- When taking on new credit, look to having a mix of credit types. Different kinds of credit
make you appear more financially sophisticated and increases your credit score.
To get free credit scores, your free credit report and free 30 days of credit monitoring,
please go to
free instant credit reports.
