How to Play the Credit score Game:
Many people don't know what most impacts their credit score. Very often I hear people state that they don't want their credit pulled for fear of their credit scores being negatively affected. So what is the scoop on how to get higher credit scores and keep them high?
1. Pay your bills on time… All of them. "On time" in the credit world is less than 30 days late.
2. Work to keep your credit card balances at 25% of your credit limit or less. If you have a limit of $1000 and you charge $900 every month and pay it off completely every month your credit scores will be negatively affected because it looks like you are carrying a $900 balance every month. I suggest getting your credit card limit either increased or begin charging less each month.
3. Don't co-sign for someone who doesn't pay their bills. If they don't pay their own bills, what makes you think they will pay for the ones with your name is on?
4. Get your free credit report each year to make sure that no fraudulent items are appearing or any medical collections have attached themselves to your credit.
5. Maintain about 2-3 revolving accounts with little to no balance. The "length of history" of open revolving credit helps maintain high scores.
6. The Truth about inquiries... I had to call equifax, experian, and transuninon myself on this one. They officially allow up to 8 mortgage credit pulls in a 1-2 month period so that someone can fairly shop for a mortgage. That means you can go to 8 banks in one day and have the same credit score on every report. First, I wouldn't recommend testing this "8 credit pull theory", but it does bring some clarity to the fear having multiple companies pull your credit. Secondly, don't take this rule too far. If every month you had several companies pull your credit that will indeed affect your credit score negatively. If you don't apply for new credit very often, then rest assured that a couple pulls on your credit report will not affect you negatively.
I hope this helps! There are always more details to good credit scores, but if you follow these basics you will do just fine! Upward and onward to higher credit scores!
-Mortgage Consultant for Life