10 Ways To Protect And Improve Your Credit Report Rating

A Credit Score or Credit Report Rating is a number lenders use to help them decide whether or not you will pay them back on time. It accounts for the amount of interest you have to pay for a loan or a credit card.



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Your credit score is a fluid number, and it changes as the elements in your credit report change.

Increasing your score in just a few points will make a big difference in the interest rate you will pay for a purchase.

If your credit score is high enough, you’ll have no problem qualifying for a lender’s best rates and terms on auto financing, home loans and small business loans.

The following are a few tips about how you can protect and improve your credit report rating.

1 - Order Your Credit Report.

Your credit score is based on your credit report, so you should begin by ordering your reports and reviewing each one for accuracy. You can get your reports from a service such as MyFico.com, or order from Equifax, Experian and Trans Union separately online or by phone.

2 - Check Your Credit Report Information for Inaccuracies.

Check the identifying information for name, social security number, birth date and incorrect address. Make certain that old negatives and paid-off debts are deleted. Check for accounts and delinquencies that are not yours, late payments, charge offs, lawsuits, judgments or paid tax liens older than seven years old. Also, paid liens or judgments that are listed as unpaid, duplicate collections, bankruptcies that are older than ten years and any negative information that is not yours.

3 - Separate or Combine Your Credit History With Your Spouse's.

If you are married, separated or divorced, an excellent strategy for repairing your credit is having your credit report issued in your own name. Whether you and your spouse have gone through financial difficulties together or all or most of your financial problems can be attributed to your spouse or former spouse, separating your credit histories can help you both repair your credit. Write to the three credit bureaus and request that a credit file be created in your name only. Now, if you have bad credit and your spouse has good credit, getting his or her credit histories into your file may be just what you need. Contact all three credit bureaus and ask that they merge your files.

4 - Always Pay Your Bills on Time.

Payment history makes up more than a third of the typical credit score. If you paid bills late in the past, you can improve your credit report rating by starting to pay your bills on time. Lenders are looking for any sign that you might default, and a late payment is a good indicator that you are in financial difficulty.

5 - Keep Credit Cards Balances Low.

Carrying smaller balances is the best way to increase your credit score. The score measures how much of your limit you use on each credit card or other line of credit, and how much of your combined credit limits you are using on all your cards. Within 60 days, paying down credit card balances can increase your credit score by as much as 20 points.

6 - Try Not to Open In-Store Credit Cards.

Although your first credit accounts can serve to build and improve your credit history, there comes a point when each subsequent credit application can reduce your score. New credit cards reduce the age of your credit history, and a department store credit card isn’t good evidence of credit worthiness. Every time you apply for a retailer’s credit card your credit store gets dinged.

7 - Be Conservative When Applying For Credit.

Having at least one credit card that’s more than 2 years old can help your credit report rating by 15 percent. Make sure that your credit report is checked only when necessary. Or, if you are shopping for a home, try to apply for loans within a two-week period. By keeping the loan process within a two-week period, all of the credit report lookups are seen as one single request.

8 - Ask For a Quotation Before a Formal Application and Be Honest.

Lenders may interpret an abnormal number of credit application searches as indicating that you have applied for an unmanageable level of credit or even suspect fraud. When shopping around for credit, ask companies for a quotation before making a formal application. If the company needs to check your credit report to give you a quotation, make sure it only makes a quotation search. Don't lie or fudge the truth on an application form. Lenders may find out and any inaccuracies on your form will tell against you and cause problems in future applications for credit.

9 - Don’t Close Credit Cards or Other Revolving Accounts.

Shutting down unused accounts that have outstanding balances without paying off the debt changes your “utilization ratio,” which is the amount of your total debt divided by your total available credit. It will reduce the gap between the credit you are using and the total credit available to you, and that can hurt your credit report rating.

10 - Inform the Credit Reporting Agencies of Unexpected Circumstances.

In case you are falling behind on paying your bills because unexpected circumstances like unemployment, illness, personal or family issues, you can write a short explanation to the credit bureaus.

They will add the information to your credit report. You should also call your creditors to explain the circumstances and, if possible, work out a payment schedule you can meet.


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