Credit Score Tips - by Debt Freedom Tips

Below is a collection of credit score tips and facts that you may find useful. We regularly add and update our credit score tips to help you find innovative ways to boost your credit.
 

Credit Score Tips and Facts

Your credit score impacts the cost of borrowing money (interest rate). The higher your credit score, in general, the lower interest you will be offered by creditors. Take active measures to keep your credit score high, and your overall loan payments will be lower comparatively.

Credit Score Breakdown:
 760-850 is Superior
 720-760 is Good
 600-720 is Moderate
 500-600 is Poor
 < 500 is Bleak

Over 70% of all credit reports contain errors that impact your costs and ability to borrow money. You should actively track your credit score and dispute any errors you find.

If your credit is good, and you are able to make your debt payments, you may want to consider refinancing your home or consolidating debt. Interest rates are very favorable, and you may be able to reduce your monthly obligations considerably.

If you have a good credit score, simply becoming 30 days late on a single bill will make a significant financial impact. A new car loan will be influenced by as much as $26 per month, and nearly $100 per month on a home mortgage. Read the full story at Yahoo Finance.

FICO states that bankruptcy does the most damage to a credit score (~240 points), followed by foreclosure (~160 points). Maxing out a credit card has the least numerical impact - as few as 10 points.

Do your best to pay your bills on time. Set up automatic bill payments if possible, to lessen the chance of simply forgetting. Delinquent bill payments, and bill collections, can have a major negative impact on a credit score.

Keep your balances low on credit cards and other "revolving credit." Repay your monthly balance in full each month. High outstanding debt will affect your credit score.

Open new credit accounts only as needed. More available credit means more potential risk. Take only what you need and can afford. When deciding how much credit you can afford, consider your ability to make payments if all of your credit is maxed out.

Pay off debt rather than moving it around from creditor to creditor. Owing the same amount of debt, but having fewer open accounts, may lower your credit score.