Increasing Your Credit Score The Smart Way

If you’re one of those people who are looking to buy a house in the next year or two, you should give serious though to increasing your credit score.  This is a great idea, as the higher your score, the lower interest rate you’ll qualify for when you do take out a mortgage.  And its even more important these days, as the mortgage crisis has resulted in lenders getting a lot stricter with their loan standards.  Over the past five years, they’ve been handing out mortgages like Halloween candy, but those days are over.

When it comes to increasing your credit score, it’s important to do it the right way.  There are a lot of scammers out there, preying on people who need to raise their FICO.  That’s not to say that every credit repair service is a scam; far from it.  There are many legitimate ones.  But the ones you want to watch out for are those that promise to dispute every single negative item on your credit record, no matter how valid or accurate the information is, and keep doing it until the information is removed.  That might have worked 10 years ago, but the credit bureaus have gotten wise to it, and are fighting back.  They simply won’t give in these days.

Increasing your credit score on your own can be done, and it’s the smartest way to do it.  The one thing you can do that will have the most impact is to pay down as many credit card balances as you can.  When it comes to raising your FICO, that’s where you’ll get the most bang for your buck.  The second most important thing is to stop using your cards for more than about 25% of your balance every month.   Those are the two best ways of increasing your credit score, and you won’t have to pay a credit repair firm anything.