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Home > Financial Fitness > Resources > Financial Articles > Credit & Debt Management > Smart Steps To Repair Your Credit Score
Smart Steps To Repair Your Credit ScoreDo you know your credit score? A low credit score could be costing you money. People with poor scores usually pay higher interest rates, which translates into larger monthly payments for a mortgage or an auto or student loan. Poor scores can also cause you problems when renting an apartment, signing up for a cell phone plan or even getting the job you want. Luckily, according to the Virginia Society of CPAs, there are steps you can take to try to improve your score. Setting the score Your credit score is calculated by three national credit bureaus: Equifax, Experian and TransUnion. The scores generally range from 300 at the low end to 850 at the high end. The score you get from each credit bureau may be slightly different, but they should all fall within the same range. The credit bureaus consider several factors when they determine your credit score. If you’ve had many late payments in the past or have filed for bankruptcy at some point, those facts will lower your credit score. However, those problems will carry less weight if they occurred in the distant past, rather than the last year or so. The bureaus will also examine how much outstanding debt and how many credit card accounts you have. The length of your credit history is important, too, so a recent graduate with a brand new credit card may get a lower score than someone with years of good payment history. Raising your score What’s the best score to have? Most people who score in the mid-700 range or higher will likely qualify for the loans they want without having to pay a premium for credit. But how do you raise your score if it’s not at that level? Check your credit report It’s a good idea to review your credit report with the three credit bureaus regularly to make sure their information is accurate. You are eligible to get a free credit report every year from each of the three major credit bureaus. To learn more, go to www.annualcreditreport.com or call (877) 322-8228. Reviewing your report enables you to correct any mistakes you may find. In addition, if you find a number of errors, it could be an indication that you are a victim of identity theft. If this is the case, someone is using your personal information, which is something you’ll want to remedy as quickly as possible. Your CPA can help What can you do to receive and maintain a healthy credit score? The best advice is to get one or two credit cards while you’re relatively young, and use them wisely. That makes it possible to build a substantial credit history and demonstrate that you are a good credit risk. Managing credit properly is just one of the steps toward maintaining healthy finances. If you have questions about your credit score or your debt management plan — or any other financial issue facing your family — be sure to consult your local CPA. The Virginia Society of Certified Public Accountants (VSCPA) is the leading professional association dedicated to enhancing the success of CPAs. Founded in 1909, the VSCPA has 9,000 members who work in public accounting, industry, government and education. For general information, please visit the Press Room on the VSCPA website at www.vscpa.com, e-mail vscpa@vscpa.com or call (804) 612-9424. To search for a CPA in your geographic region, visit www.financialfitness.org and click on “Find a CPA.” ©American Institute of Certified Public Accountants LAST UPDATED 3/6/2010
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