Free Credit Report

Your credit rating is a 3 digit number from 350 to 800. It is calculated based on the average score from the three credit reporting bureaus. These are Experian, Equifax and TransUnion. Each of these firms use a slightly different algorithm to generate a credit score. A number of factors comprise the figure, but there are five major ones that you should know about.

Probably the very best way to improve the credit rating is to pay any debt on time. This can include credit card bills, mortgage installments, leases car fees and anything else that has a due date. Approximately 35% of the score is based upon the timeliness of payments. Even one tardy payback can significantly reduce the rating by several points. This can be potentially devastating to potential customers.

Another large part of the calculation is debt level. This is the amount of money borrowed or how close you are to the actual limit of any card. It is extremely significant in the actual rating because it is inversely proportional to the credit number. That is, the higher the debt level becomes, the more the credit score falls. It is imperative that you pay down as much debt as possible in order to increase the personal credit rating.

Next is the credit history. A person with a longer record of successful borrowing will enjoy a higher number because of the trust factor. Long standing accounts will factor into this rating because they signify that a person will pay back the money that was borrowed. To the credit bureaus, this means that you are a good risk and should be extended full courtesy. Make sure to keep open any long standing accounts whenever possible.

Check your credit rating on the internet today with Experian – they offer a free 30 day trial so you can see your free credit report online.

One more item that will weigh heavily into this calculation is the amount of inquiries done to an account. Each of these will actually factors negatively for the most part. They signify a heavy amount of debt and can remain on the permanent record for up to two years. The reporting bureaus will only carry these items for one year however. Try to limit inquires whenever possible.

Finally, a mixture of credit types is a great way to increase the credit rating. This shows to the credit companies that you are aware of how to manage debt and won’t overextend your credit. This is a great way to manage your score and keep it low.