How to Improve Your Credit Score in 2009

As a result of the economic crisis, lenders are demanding a higher credit score to approve new credit in 2009. That means that it is more important than ever to focus on increasing your credit score. So, let’s get started on your road to raising your credit score.

The highest possible credit score is 850 and the lowest is 300. The average person has a score between 600 and 800. To really benefit, you must increase your credit score so it is at least in the average range.

To improve your credit score, you must understand how your credit is calculated. Your credit report contains data including your payment history, debt total and available credit. This info is strategically placed in a mathematical formula, and then calculated to generate your credit score. The determined number is a highly accurate prediction of how likely you are to pay your bills.

The next and perhaps most important step is to increasing a credit score is identifying credit information that damages a good credit score. This includes but is not limited to collections, late pays, repossessions, charge-offs, bankruptcy, and judgments.

About a 1/4 of all credit reports have an error that's serious enough to keep a consumer from receiving credit approval. And, another large amount of credit reports contain mistakes that force a consumer to pay higher interest rates on big ticket items like mortgages or car loans. If you improve your credit score, you’ll save money, time and embarrassment.

Errors can end up on your credit report for numerous reasons, including: mistaken identities, identity theft, and administrative mistakes. Regardless of the reason, if you want to raise your credit score, you must dispute any errors you find. When you find an error, you should write a letter to the top credit bureaus and ask them to investigate the mistake.

Equifax, Experian and TransUnion all allow consumers to easily dispute any error right on the website. Consumers can easily track the stage of the investigation process, and hear back a lot sooner from the agency about the outcome.

Thanks to the unstable economic times, it’s more important than ever to raise your credit score. By taking the steps listed above, you’ll be on your way to a stellar score, and a better life.