Improving credit SCORE

Improve your credit score, before you buy that home or car, follow these few easy steps and save thousands. your credit score is a very important number!
The interest rate you'll pay is determined by this number, a two points difference could cost you Thousands per year on your mortgage payments.

About FICO scores
Credit scores are called “FICO scores” credit bureau scores in America are produced from software developed by (Fair Isaac and Company) this scores are provided to lenders by credit reporting agencies. FICO scores ranges from 350-850 Lenders categorizes the Scores into varies groups

780 above = A+
720 - 779 = A-
680 - 719 = B
620 - 679 = C
550 - 619 = D
549 below = F

Savings Example

Higher FICO scores, get you lower mortgage rates, .
Example, a median priced property @ $200,000 on 30-year fixed mortgage.

FICO rates payments
760 - 850 6.00% $1,199
700 - 759 6.30% $1,238
680 - 699 6.50% $1,264
660 - 679 6.80% $1,303
640 - 659 7.30% $1,371
620 - 639 8.00% $1,468

Now, you see that FICO Score can makes such a big difference, below some suggestions, tips on how to fine tune your Credit FICO Score before you apply for that loan.

Improving your Credit FICO Score
If your score is low, improving it will take time! there is no quick fix. In fact, quick-fix efforts some times can make it worse. read & follow these tips:

• Pay bills on time.
  Late payments and collections have a major impact on your score.
• If missed payments
  Get it current & keep it current
• Trouble making payments, contact your Lenders or get legitimate credit counseling.
  This won't help your score immediately, but if you manage your credit and pay on time, score will get better later on.

Tips on your Credit card balances

• Keep balances less than 50% of credit limits
  High outstanding debt balances effect score negatively.
• Spread your balance among your cards
• 1 or 2 credit cards close to maxed out while 2 other are not even used, avoid this.
  
• Reduce your debt by pay offs, not moving it around.
  Owing the same amount but having fewer open accounts may lower your score.
• Oldest Unused credit cards should not be closed
• it shows your credit history, the longer you have credit the better.
  
• Getting to many new credit cards that you don't need, just to increase your available credit.
  This approach actually could lower credit score, have a lot of new account buildup can look risky if you are a new credit user.

• Closing an account doesn't make it go away
• In fact closing a bad account could hurt your score.
  
• If you Rate shop for a given loan within a focused period of time.
  FICO® scores won't be reduced for a single loan within short period.

Finally, it's wise to check your credit report on yearly bases to make sure there are no mistakes. Get a FREE report at http://www.annualcreditreport.com and fix any discrepancies. You can dispute discrepancies online if you have documents to prove it at experian.

Note,Paying off a collection account will not be remove from your credit report, if years old collections are paid, it will show as a current late payment transaction and could even reduce your Credit FICO Score

Unless a lender specifically requires this collection to be paid, this will stay on your report for seven years.