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Francis Vayalumkal
Your Credit Score and You
By Francis Vayalumkal

A credit score differs from your credit report, in that a credit score is a rating used by lenders to determine the risk a company incurs by lending you money or providing you with a service. A credit report is a compilation of your credit history, including personal information, credit account details, inquiries, debt and may include any public records such as bankruptcy claims, liens and overdue child support.

Your credit score can range from 300 to 850, but the majority of consumers fall between the 600's and 700's. The higher your credit score, the lower your credit risk. It is recommended you check your credit report and request a current credit score every six months to one year and update any information that may not be accurately reflected in the report.

There are several ways to improve your credit score, which can help you when applying for credit cards, car or home loans, and also provide you with a better selection of financing options and rates.

Here are some common-sense ways to raise your credit score:

1. Look at all your credit cards. Determine which ones you rarely use and close them. For those you plan on keeping, try to keep their balance low, and try not to request balance increases just to have available credit. This can actually hurt your credit score.

2. Pay off your credit card bills on time, or better yet, in full. If you tend to pay the minimum balance and incur monthly percentage rate increases, it can eventually build up and lead to large debt.

3. Minimize the amount of credit inquiries. Try not to apply for multiple credit cards over a short period of time. This can be seen as unusual behavior and marked negatively on your credit report.

4. Update your personal information. Make sure your credit report lists your current address, phone number, and place of employment. Don't expect the credit agencies to know exactly where you work and live. This information can be overlooked and it is up to you the consumer to make sure it is accurate.

5. If you owe money to a collection agency, try to resolve the matter. A collection agency can report late or missed payments and this can be a red flag for many companies viewing your credit history.

Remember, raising your credit score won't happen overnight. It takes time and patience, but is well worth the wait. Having a high credit score can open doors and help you afford a better home, a nicer car, and better interest rates.

By following these helpful hints, you can be on your way to a better credit score and a brighter future.

Francis Vayalumkal is a loan officer at Market Street Mortgage and can be reached at (813) 971-7555.

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