Seven Tips for Improving and Maintaining Your Credit Score

Headquartered in Valencia, California, Think Credit Reports is an online provider of credit scores and reports. Think Credit Reports offers its members detailed reports and scores from all three major credit bureaus on a monthly basis, with unlimited access to reports and daily credit monitoring and alerts. Credit scores indicate an individual’s creditworthiness to banks, landlords, insurance companies, and lenders. In order to maintain good credit standing and improve lower scores, review the following tips.

1. Be sure to pay bills and balances before payment due dates. When making payments, always at least pay the minimum, but try to pay balances in full at the end of each month.

2. Make use of bank services such as payment reminders and automatic payments in order to remain current.

3. If unexpected charges put you close to your credit limit, split up payments to avoid negative marks on your credit report. Make one payment before the statement closing date to reduce the balance seen by credit bureaus, and pay the remaining balance before its due date.

4. Rather than charging different credit cards for different purchases, select one or two cards for everyday use. Balances across multiple cards can hurt your score.

5. Keep unused accounts open. Canceling a credit card causes a decrease in available credit. Keep accounts open and consider using an unused card for reoccurring charges, such as a utility bill, to keep the card active.

6. Maintain low usage rates. A significant factor in credit scores involves your revolving credit versus your usage rate. Aim for a small percentage, between 10 percent and 30 percent of your total revolving credit, and keep balances low.

7. Establish an emergency fund. A 15 percent cushion of available credit or a savings fund of three to six months of living expenses can lower the amount you may need to borrow in the case of a dire situation, such as losing your job.

How Credit Bureaus Operate

For more than five years, Think Credit Reports has provided consumers with their credit information as compiled by all three major credit bureaus. Think Credit Reports also offers premium members a number of additional services, including quarterly updates and daily monitoring.

Credit bureaus operate as the most common type of credit reporting agencies (CRA). Credit reporting agencies are responsible for both collecting and disseminating information about a person’s credit, as creditors report it to them. Typically, a smaller agency that collects credit information communicates this data to its affiliate larger bureau, which allows the three major entities to report accurately to potential creditors.

Today, the three national credit bureaus are Experian, Equifax, and TransUnion. Each receives reports about a borrower’s payment history, open accounts, paid loans, and inquiries into new accounts. Because these data come from different sources, not all bureaus have the same information about a particular borrower. For this reason, borrowers and those checking their credit frequently request reports from each of the three national bureaus.

Calculation of Your Credit Score

Think Credit Reports provides credit reports and monitoring to customers on a subscription basis. In addition, Think Credit Reports helps its customers to understand how their scores compare to national averages and creditor expectations.

Determined by an individual credit bureau, the credit score assigns a number to an individual’s level of responsibility in borrowing and repayment. Scores range from 0 to 800, though most scores lie between 600 and 750. A score incorporates information about the borrower’s payment history, amount owed, types of credit used, amount of new credit, and length of time the person has been borrowing.

For most borrowers, payment history makes up 35 percent of a credit score. This information refers to timeliness of past repayments. Another 30 percent of the score relates to the amounts a borrower owes. Relevant information for this category includes how much of a person’s available credit is being used and how much he or she owes on particular types of accounts.

Types of active credit contribute to 10 percent of a person’s credit history, while the number of new accounts contributes to another 10 percent. If a borrower does not have a long credit history, multiple applications may lower the total score. Credit scores also take into account how long a person’s accounts have been active and how long he or she has had accounts. These factors combine to form a complete picture of an individual’s use of credit throughout his or her lifetime.

How Identity Theft Can Impact Credit Scores

Based in Valencia, California, Think Credit Reports offers people the ability to monitor their creditworthiness and continuously receive updated credit reports from Experian, Equifax, and TransUnion. Think Credit Reports’ services are particularly vital, given an increase in identity theft, which can have an outsized impact on people’s ability to get loans and mortgages or to get them at good rates.

Identity theft can derail individuals’ financial well-being in a number of ways. In cases where a personal credit card is used fraudulently, victims may be unable to promptly pay for the extra charges that have accrued. By the time that the situation is resolved by the lender, long-term damage to the credit report (which is difficult to undo) may have occurred. This threat is particularly acute when thieves redirect bills to new addresses, resulting in cardholders being completely unaware of fraudulent transactions that have gone through. Identity thieves may also target personal savings and checking accounts, draining funds in ways that make it impossible for victims to pay mortgages, rent, and bills before irreversible harm has been done to their credit score.

Who Can View a Credit Report?

Think Credit Reports allows consumers to check their credit scores and reports from all three active credit bureaus. Think Credit Reports also offers monthly updates to reports and scores, as well as alerts to any activity, so that customers can know what credit report checkers are seeing.

An individual’s credit report is legally available to anyone with a “legitimate business need” to see the data it contains. For example, credit card companies may need to check a person’s credit history when deciding whether to approve a card application. Similarly, landlords may check a credit report to determine a person’s record of late or delinquent payments, in advance of granting a lease.

Government agencies have the right to check the credit report of anyone applying for official benefits. In addition, any government organization may use a credit report to check basic information such as name, address, and employer. Finally, a potential employer may check an applicant’s credit report, but must receive consent. These checks may not include the applicant’s numerical credit score.

Reasons for Maintaining Solid Credit

Think Credit Reports offers consumers credit data reports from all three major credit bureaus. For more than five years, Think Credit Reports has also provided users with quarterly credit score refreshers for no additional charge.

There are a number of reasons indiduals should stay up-to-date on their credit score, as a poor score can cause a number of issues. Buying a house or car are two of the major purchases that require good credit. In both instances, consumers will likely be signed up for a payment plan that will last many years or even decades. A solid credit score indicates that an individual has a history of making timely payments. Starting a personal business is another example of when a reliable credit score can come in handy, as a variety of loans may need to be taken out in order to launch a start-up. Investors may even be interested in a young entrepreneur’s credit score before bankrolling a new project. Lastly, a good credit score can land an individual lower interest rates when seeking any type of financial assistance.

The Importance of Regularly Checking Credit Reports

A premium provider of personal credit information, Think Credit Reports provides members with daily credit monitoring and regular credit reports from the three credit bureaus – Equifax, TransUnion, and Experian. Recognizing the growing threat of identity theft, Think Credit Reports’ 24/7 credit monitoring keeps members aware of any changes or problems that may show up.

Regularly checking credit reports is important for several reasons. According to CBS News reports, around 80 percent of reports have errors, including everything from misspellings to incorrect Social Security numbers. Errors also occur when creditors report incorrect information. By regularly checking their credit reports, individuals can correct a problem before it causes major damage to their scores. Mistakes can be disputed with both the creditor and credit bureau by simply sending a letter explaining the details.

Checking credit reports also allows individuals to spot any incorrect debts. Unrecognized debts are typically a sign of identity theft, but may also be a sign of debt error. When identities are stolen, the victims are often unaware of the problem until the damage has been done. By regularly checking credit reports, signs of identity theft are found early on, allowing the necessary action to be taken. Solving these problems early on makes preventing future fraud easier.