Credit Score Myths

There are many people that will provide suggestions for ways to improve your credit score. This article will focus on some of the myths associated with credit scoring. It's believed that more credit or open accounts indicate greater credit worthiness. It's also believed that having only 1 or 2 major credit cards is best. Fact - Having 3 - 4 open revolving accounts will yield more points over time. The type of credit or credit issuer has little bearing on credit scoring.
Fact - Revolving major credit cards with low balance to high credit limits are preferred. It's true that all account that reports to your credit file must be positive and paid as agreed, however certain types of accounts, such as department store charge cards, mail order credit accounts and aggressive finance company accounts negatively impact your credit score (Individual Companies will not be identified). Some people believe that it's financially better and closing accounts will automatically increase your credit score. Fact - Closing accounts may actually be a detriment to your credit score. What's important is to close the proper accounts first. Your credit score is a numerical value based on several factors. The primary factor is your repayment of promised agreements. The longer that you have paid as agreed or have had arrangements to pay, lend to your credit payment longevity. Simply stated, in most cases you should close your newest / most recent accounts first. There are several additional qualifiers that may contradict the aforementioned. If you are purely raising the credit score the advise would be prudent, however it may make more financial sense to close the older account if it has a really high interest rate and due to credit improvement your most recent accounts have high credit limits with significantly lower interest rates. Finally, when shopping for a home or car multiple credit inquires won't affect your credit score. Fact - when applying for home or auto loans most people shop several offers before making a final decision. For this reason, your credit score will not be impacted due inquires that occur within a two week time frame. Fact - Your credit score will improve using tips such as these and those provided by www.score1st.com

Improving Your Credit Score

The best way to save money on anything that you finance is by increasing your credit score. Your credit score is used to determine your credit card rates, mortgage rates, auto loan rates, personal loan rates, insurance rates and the rate of interest on just about anything that you finance. The big 3 CRA's (credit reporting agencies) use historical data that they receive from creditors about your credit experiences. The info that's reported may be good or bad. It may be factual or incorrect. The thing to understand is that CRA's report what they receive. Your information is not shared equally to the CRA's. Creditors are not required to report your credit experiences to all 3 credit bureau's. They may submit your information to only 1 credit bureau, perhaps they may share your payment history with 2 credit bureau's or they may submit your info to all 3 of the CRA's. Another issue that can influence your credit score is WHEN, the creditors submit your info to the CRA's. If you take a close look at your report, you'll notice that some of the creditors that you have are reporting as of the most recent month, yet some of the information that's being reported is from 2 months or older. You may also notice that some of the CRA's receive your info ahead of the others. This can be quite confusing and frustrating.
Remember by better managing these types of issues and many other reporting inaccuracies you will save money on interest expenses for many months and years to come. For helpful tips to improve your credit and to find out about receiving free credit reports and scores visit: www.score1st.com