Tipping the Credit Score Scales in Your Favor

You might be wondering what you can do to improve your credit score.  Here are some good tips from the Credit Scores class I took last week:

• Pay ALL of your bills on time or early.  Even a 30 day late on a small credit card can have a significant negative impact on your credit score.  Sign up to have the minimum payment automatically deducted on the due date to ensure that no matter when your "real" payment gets there, you have at least paid your minimum on time every month.
• Don't co-sign loans!  Remember that their late payment becomes your late payment.  No exceptions, no do-overs.
• Don't open new accounts unless absolutely necessary.  Inquiries may or may not affect your score depending on the rest of your credit history.  There are two types of inquiries: hard or soft.  A "hard" inquiry is when your full credit file is pulled, as when you try to open a new credit card.  A "soft" inquiry is when you pull your own credit score.  Fortunately, multiple credit inquiries from mortgage companies or auto loans within a 14 day period will not hurt your score, so you can shop around.  Just be careful where you do this- online mortgage companies are reportedly not the way to go.
• In related news... Department Store Credit Cards hurt your credit!  It can be so tempting to "save 10% all day today".  However, the credit is only good in that particular store, so it isn't good for your overall rating.
• Report Fraud Immediately!  If you are a victim of fraud, contact the credit bureaus, your credit card companies, banks and the FTC at http://www.ftc.gov/
• Monitor your credit.  Order a FREE copy of your credit report once a year at http://www.annualcreditreport.com/  This site will not require you to sign up for paid service.
• If you are planning on refinancing or buying a home, do not make any purchases or runup the balances on your cards.  Wait until you move in to buy that furniture, carpet, appliances, etc.