If you are not aware of your FICO score then you really need to approach one of the credit rating agencies and ask them for the credit score which they have calculated for you.  Based upon the credit rating calculation developed by Fair Isaac & Co (FICO) this information is vital for any kind of credit which you attempt to obtain.  While the different credit rating agencies in the US will have different variations of the FICO calculation, they are all very similar and relate to the elements of your financial history.

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Please find below a list of simple actions you can take to both protect and often improve your credit score :-

Pay Your Bills On Time

While many people may think nothing of being a few days late with their phone bill or their car insurance, even if they have the money available, they will be damaging their credit rating.  Someone who is not able to pay bills on time, in the eyes of the financial markets, offers a higher degree of risk of default – cash flow is King in the financial sector.

Always Check Your Credit Score With Each Credit Reference Agency

Under US law you are actually allowed to request one free copy of your credit rating from each of the credit reference agencies, once a year.  Make sure that you use this entitlement as some credit agencies have been known to retain incorrect information which can reflect badly upon your credit score.  Any inaccuracies should be corrected as soon as possible.

Open A Bank Savings Account

If for some strange reason you do not have a bank savings account this can count against you in the credit scoring industry.  You need to offer the agencies a clear picture of your finances to allow them to calculate your correct score.

Do Not Max Out Your Credit Cards

If you are in danger of maxing out on your credit card you need to ensure that you stay within your agreed limits.  Indeed the higher the buffer between your debit balance and your maximum lending figure, the more positive effect this will have on your credit score.  The agencies are only asking to see a careful spender and not someone who is reckless with a credit card in their pocket.  If you feel that you may go over the limit of your card then as a last resort ask the provider for an increase on your limit.  Going over your limit will have a material affect on your credit rating.

Do Not Open Multiple Bank Accounts

The more bank accounts that you apply for, whether you receive them or not, the more impact upon your credit score.  Always try and keep your financial arrangements as “tight” as possible so that they are easier to monitor.

If Possible Pay More Than The Minimum Payment Required

While it has been rumored, but not officially confirmed, many people believe that you can increase your credit score overnight by paying off more than the minimum required on your loan or credit card.  The financial markets are crying out for people who are able to pay off their loans on time, as the chances are they may be able to sell you another loan in the future.

Pay Off Loans Where You Can

Your credit score will be negatively affected by the number of loans which you take out and positively affected by the number of loans which you repay in full.  If you have surplus cash it may be in your best interests to repay loans where possible and increase your credit score.

Be Careful How Many Times You Apply For Credit

Each time you apply for credit whether you are successful or not, this will be marked on your credit file and influence your credit score.  The more applications you make, especially in a short space of time, the more desperate it will look to the credit companies.  Only apply for the finance which you need and keep your financial affairs focused.

These are just a few tips which will ensure that you at worst retain your credit score and hopefully increase it over time.  You never know when you may need credit so it is vital that you keep your record as “clean” as possible.

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