Give yourself time. Time is considered one of the most significant aspects that can help improve your credit score. pWhen applying for a loan, lenders will evaluate your ability and willingness to repay your loan. Your ability to repay may be judged by looking at your overall income and debt, and how you are inclined to repay the loan, may be judged by looking at your credit. When you have good credit, lenders feel more secure about your ability and willingness to pay back the new loan. One way creditors evaluate your credit is by use of a computer model that analyzes your credit report and gives it a score. The most widely used credit scores are FICO scores, developed by Fair Isaac Company. Some of the factors that impact your credit score include:

Try to keep your credit balances as low as possible. You can also ask the lender to increase your credit limit which can increase your credit score.

Payment History: Making timely payments is the best way to increase your score

High Credit Limits: Owing a lot of money on numerous accounts may indicate overextended credit. So, the lower the amount outstanding, the more likely it is that your score will be higher.

Number of Trade Lines: The number of credit cards, lines of credit and other types of credit you have available will affect your score. If you have a lot of trade lines, this may decrease your score because of the risk that you might not be able to pay off all of your accounts. It is also desirable to have more than one type of credit – installment loans, credit cards, and a mortgage for example. Lenders generally want to see that you have credit available and that you can handle your credit wisely.

Don’t beat yourself up. I know this maybe hard, especially if you have a low credit score.

New Credit: New credit is considered more risky. Do not apply for credit you do not need.

Length of Credit: The longer the credit history, the better the score generally

Inquiries: Each inquiry will stay on your credit and affect your score. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time. Credit bureaus have recognized that borrowers may apply for credit at more than one place for the same transaction when applying for an auto or home financing.

New credit – Applying for too much new credit is one of the easiest ways for people to inadvertently harm their credit score.

Because your credit scores are based upon your credit, it is important that you obtain and review a copy of your credit report.

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