You might think that lenders make decisions based on some intricate financial calculation. In fact, lenders can easily pull up your credit report and see your credit score, which is based on how well you pay your bills on time, how much debt you’re carrying, how long your credit history is, your pursuit of new credit, and the types of credit you have.
If you’re going to whip your credit score into shape, you’ll want to know what you’re working with. Get a copy of your report and see what your lender sees.
Credit reports can be ordered for free through the mail, or for a small fee you can download your credit report – and your score – online. More information is available at Equifax or Transunion. Scores range from 300 to 900. You’ll want to target a score of 680 or higher to access the best credit rates and terms.
First, check your credit report carefully for any errors. If you spot a problem, contact the agency immediately to have the issue corrected.
Next, look carefully at the factors that are pulling your score down. It takes some time – and some good habits – to build up a low score, but you can probably boost your score by several points fairly quickly by addressing your top credit issues.