Boosting Your Credit Score To Get The Best Credit Card Deal

Making Your Credit Rating Work For You

One of the basics of getting the most competitive credit card deal in the market is to ensure you have the best credit record possible. Few of us are lucky enough to be earning a six-figure salary, and many people are likely to have other financial undertakings that a potential lender will want to take into account. None of this, however, should preclude you from getting a top bracket credit rating. Getting a credit score of 700+ may be beyond some consumers, but lifting your credit rating to a point at which lenders will furnish you with some of their best deals is not an insurmountable task.

It can be a stressful time applying for a new line of credit. Many consumers get upset when applying for a new credit card when they find out their credit score is low, and they have poor credit.

A lower credit score can impact the amount of money that financial institutions will lend you. It can also impact on the rate of interest at which you borrow. In some cases, the difference between having an excellent credit rating and a poor one could be getting a 0% deal on your credit card, and paying an APR that touches 30%. Sometimes financial institutions won't even lend you a dime, based on a low credit score.

A variety of factors can impact on your credit score. Generally speaking, lenders love stability more than anything else. Paying amounts owed on time is but one of many variables. It could be that you've lived in more than one address over the preceding three years; or having borrowings with a variety of institutions. It could even be down to the fact that you've got too much credit already at your disposal.

But just what goes into your credit score? A report by the analytics experts Fair Issac recently broke credit scoring down into five categories and assessed their importance on the final rating.

Most important was how you had paid you bills in the past with the most emphasis on recent activity. Naturally, paying all your bills on time is good; paying them consistently late is bad. Having accounts that were sent to collection agencies is even worse, though nowhere near as bad as declaring bankruptcy. Paying your bills in a timely and consistent manner contributed to 35 percent of the score.

Next most important was the amount of money you owe and the amount of available credit at your disposal. The assessment of outstanding debt fell into several categories, and included credit cards, car loans, mortgages, home equity lines, and so on. Also given consideration was the total amount of credit available. If a customer has 10 credit cards that each have $10,000 credit limits, that totals $100,000 of available credit. Generally speaking, people who have a lot of credit available tend to use it. This makes them a less attractive credit risk. This amounts to 30 per cent of the total credit score.

Also impacting on credit scores is the length of credit history (15 percent). The longer a customer has had credit - particularly if it's with the same financial institution - the more points they get.

The mix of credit contributes 10 percent to the credit score. Customers with the best scores have a mix of both revolving credit, such as credit cards, and installment credit, such as mortgages and car loans. Statistically, consumers with a richer variety of experiences are better credit risks. As far as banks and credit card companies are concerned, they know how to handle money.

The last important factor taken into consideration is new credit applications (10 percent). If you've applied for several lines of credit in the past few months this will negatively impact your credit score.

The antidotes to this are simple. Pay your bills in a timely manner, particularly in the months leading up to an application. Close unused retail store cards, credit cards and old bank accounts with overdraft facilities. Maintain long-standing and healthy arrangements with banks and other lenders. Don't apply for a stack of credit cards, loans and so on, unless you're absolutely sure it's the right product for you. It goes without saying that you shouldn't apply for a credit line unless you use it.

There's a sixth factor that can contribute enormously to a negative credit rating. In 2001 it became possible for customers to get their own credit score in exchange for a small fee. In the past, prospective lenders were able to keep this score hidden, and many unscrupulous institutions used this knowledge to charge a higher APR on credit. By being aware of your credit score lenders can't lie and say your score was low and charge higher APR on your credit card.

More importantly, it's vital that you get rid of black marks on your credit rating. Errors unfortunately happen all the time, and erroneous reports of missed payments, referrals to debt collectors and even bankruptcies can scupper your chances of getting a low rate of interest and even a credit card altogether. Query everything and haggle with credit reference agencies so that only the information that is listed on your credit history that should be there, is there.

You can find out your credit history by applying to one of several companies. Many offer an online service and can furnish you with the information both quickly and cheaply. Equifax, Truecredit and Consumerinfo are some of the best such providers.

Patience is the key to getting a great credit score - and the best credit deals. You're never going to make the jump from having a credit score of 500 to one of 700 overnight, but by implementing easy to follow and practical strategies, you can quite easily leverage your credit score to a rating that is respected by all concerned.

Ethan Hunter is the author of many credit card related articles. If you are looking for help with Credit Cards or any type of credit issue please visit us at http://www.creditcardunlimited.com

Latest News

SEC delays action on credit rating agency rules Reuters - 18 hours ago WASHINGTON (Reuters) - US securities regulators on Wednesday delayed action on adopting stricter rules to rein in the credit rating agencies until December ... SEC puts off vote on rules for rating agencies The Associated Press UPDATE 2-US SEC delays action on credit rating agency ules Hemscott Nigeria: Investment of Pension Funds - SEC Approves Five Rating ... AllAfrica.com all 136 news articles

PR Web (press release)

First California Financial Group Announces Passing of Chief Credit ... CNNMoney.com - 13 hours ago First California Financial Group, Inc. (NASDAQ: FCAL) today announced that Walter Duchanin, executive vice president and chief credit officer of its ... First California Financial Group Announces Passing of Chief Credit ... International Business Times all 29 news articles

International Business Times

Fitch Affirms Norfolk Southern IDR at 'BBB+'; Outlook Stable MarketWatch - 13 hours ago Fitch's ratings apply to approximately $6 billion in outstanding unsecured debt and a $1 billion unsecured revolving credit facility. ... Fitch Affirms Telmex IDR at 'A-'; Outlook Stable MarketWatch Fitch Rates Michigan Muni Bond Authority's $199MM SRF Revs 'AAA ... MarketWatch Fitch Rates Alaska's Lease Revs 'AA-'; Outlook Stable MarketWatch MarketWatch all 40 news articles

Credit crunch due to lack of borrowers: Lacker MarketWatch - 11 hours ago By Greg Robb, MarketWatch WASHINGTON (MarketWatch) -- The credit crunch is more about lack of opportunities for good loans than concern about bank capital, ...

HispanicBusiness.com

Target's Credit-Card Problems Could Lead To JPMorgan Role CNNMoney.com - Nov 18, 2008 s (TGT) big drop in credit-card profit in the third quarter has raised questions about whether the retailer may ultimately turn certain parts of the ... ABCPMMMFLF Spells Fed Relief for JPMorgan, Citi Shadow Banking Bloomberg all 17 news articles

PayPal to Offer Credit for Holiday Purchases Wall Street Journal - 12 hours ago By CHRISTOPHER LAWTON At a time when money is tight, eBay Inc.'s PayPal unit plans to offer consumers credit lines for online holiday purchases in a bid to ... Research and Markets: This Essential Online Retail Payments ... MarketWatch all 7 news articles

lawmakers propose tuition credit Salt Lake Tribune, United States - 9 hours ago John Dougall, R-American Fork, proposed legislation Wednesday that would give higher education students a tuition tax credit. In light of the current ... Debt load class issue Albany Times Union Economy, debt make college less affordable The Tennessean all 3 news articles

Regulating Credit Default Swaps: Will It Work? BusinessWeek - 5 hours ago By David Bogoslaw The market for credit default swaps (CDS)—derivatives that insure holders against default on a range of debt instruments—is getting plenty ... Data on credit swaps a must for US banks Financial Express all 11 news articles

Australia Corporate Bond Risk Rises, Credit-Default Swaps Show Bloomberg - 12 hours ago 20 (Bloomberg) -- The cost of protecting investors in Australian corporate bonds against default increased, according to traders of credit-default swaps. ... Japanese Bond Risk Soars to Record on Concern Banks Weakening Bloomberg Australia Bond Risk to Rise on US Rescue Delay, Deutsche Says Bloomberg all 8 news articles

Chrysler credit rating could be cut Detroit Free Press, United States - 2 hours ago BY TIM HIGGINS • FREE PRESS BUSINESS WRITER • November 20, 2008 Fitch Ratings cautioned Wednesday that it might lower Chrysler's credit rating to a level ...