Credit Score Articles Your Credit Score Can Save You Thousands In Interest Boost Your Credit Score*** Highest Payouts* Best Selling product. **** Learn how you can improve your credit score legally. Here is a riddle for you: When can 3 digits equal 4, 5, or even 6 digits? Answer: Your 3 digit credit score can save you $1,000's and even $10,000's in interest cost over the life of your mortgage loan. The money lending business is all about creditworthiness. And the basis of the creditworthiness of an individual is formulated into a 3 digit number called a credit score. While there are actually multiple formulas for determining a credit score, the most popular is called FICO, after the firm that created the initial formula, Fair, Isaac, & Company. Under the FICO system, credit score is represented by a number between 300 and 850. Scores below 620 represent marginal borrowers. These borrowers will find themselves locked out of the best loan programs with the best interest rates. The national average for borrowers in this category is an additional 3% in interest cost on their loan - IF they can even get approved. While 3% can sound miniscule to some, in this instance it is actually extremely significant. On a $200,000 mortgage financed for 30 years, the difference in payments from 6.5% to 9.5% is $417 per month, which amounts to $150,000 in extra interest over the life of the loan. Tip! Pay your bills on time. That's the first advice you'll get when you're looking for ways to increase credit score. As the above example illustrates, having a good credit score is one of the best financial moves you can make. You'll save hundreds of dollars per month, and tens of thousands of dollars over the life of your loan. Here are 5 things you can do to improve your credit score into the good or excellent range. More guidance can be found at http://creditsc0re.com. 1. Keep your credit card balances low. Keeping all of your credit card balances below the 50% threshold of available credit will raise your credit score. Keeping all of those balances below the 25% threshold will improve your credit score even more. If necessary, transfer balances from one account to another in order to meet these thresholds. dditionally, you could request an increase in your credit line. This would automatically reduce on a percentage basis the amount outstanding. Tip! Do not close old or paid off accounts. These show the credit history length and contribute to higher credit scores. 2. Pay your bills on time. The largest component of your credit score is your payment history, accounting for 35% of the weighting in the formula for determining your credit score. As such, the most important step in getting and keeping a high credit score is to pay your bills on time. If you have a low credit score because of late payments in the past, you can immediately start to raise your credit score by making your loan payments on time. To get and keep a high credit score, you must follow this rule religiously. 3. Have the credit agencies remove incorrect information. Obviously, if there is incorrect information in your credit report that is to your advantage, don't ask the credit reporting agency to remove it. However, very rarely is incorrect information beneficial to you. Periodically check your credit report to verify accuracy of content. If there is incorrect information that negatively affects your credit score, contact the credit reporting agency and have it removed. 4. Keep your older accounts, close newer ones. Roughly 10% of the factors that are used to calculate your credit score relate to the length of time you've had your accounts. It is quite common for some people to hop from credit card company to credit card company constantly seeking to take advantage of a low introductory interest rate. This makes sense from a financial point of view, but it can lead to a lower credit score. You will be awarded a higher credit score if your accounts have been open and active for a longer period of time. Multiple new accounts lower your score, whereas a stable number of credit accounts that have been used for years upon years will significantly raise your credit score. Tip! Obtain a copy of your credit score report from one of the three major credit bureau agencies: Equifax, TransUnion or Experian. 5. Borrow great credit from a relative. You may be wondering how it is possible to borrow credit from another person. It is very easy to do and is especially useful to young adults who have yet to establish credit (although anyone can benefit from this technique regardless of age). If you have a relative or close friend with excellent credit history, have them add you to one of their credit card accounts. Ideally, they should add you to an account that they have used for years, has a high credit limit, low or no balance, and has a perfect payment history with not one late payment. When you are added on this account, the payment history of this account is also recorded on your credit report because you share the account. Presto! You now have a great credit reference on your record. This is perfectly legal and can be used to immediately raise your credit score. Recently, credit scores are being used in ways above and beyond the traditional lending decision. In the fall of 2004, a Texas utility company began using credit scores to individually set prices for electricity. Some insurance companies are now using credit scores to rate the quality of potential customers and any employers are also using them as part of their decision-making process in hiring new applicants. These trends are likely to continue and expand, making high credit score even more essential with each passing year. Now is the time to start taking steps to get your credit score into the excellent range. You'll have thousands of dollars in borrowing costs and will reap the rewards for a lifetime. Tip! Do not apply for every car, credit card, and home that you are looking at as an eager consumer. Because every time you try to purchase a home, car, or get a new credit card your credit score is checked and the crediting agencies lower your score if you have had two or three credit checks withing a few months of each other. Christine Carter is a widely recognized mortgage refinancing expert. Through her website http://e-z-mortgage-refinancing.com she has helped countless numbers of borrowers get the best loan offer available on both purchase and refinance loans.