It's a good idea to check your FICO scores if you're planning a major debt purchase, like a mortgage loan or refinance. This information isn't free, unfortunately, but it's available for purchase at www.myfico.com. A word of caution: Verify that the information in your credit reports is accurate before purchasing your FICO score. Otherwise, you'll end up having to purchase it again, once the information is corrected.
Tips for Improvement
Big improvements to your FICO score don't happen overnight; but the sooner you begin, the sooner you'll see results. Start implementing the following strategies today and you'll see lower interest rates in the future:
Pay Bills on Time: Set up automatic payments for as many of your bills as possible. It'll save you time and keep you from incurring late fees.
Pay Down Your Balances: Be diligent about paying down more than you charge each month.
Keep Unused Accounts Open: Don't close unused accounts-doing so may actually lower your FICO score. It's better to keep those zero-balance accounts open so that you have more available credit relative to your total debt outstanding.
Limit New Account Openings: Only open new accounts when you need them. It's true that having a larger amount of unused credit can raise your score, but opening several new accounts at once will actually lower it.
Shop for Debt Quickly: Lender inquiries affect your FICO score. When you're collecting quotes for mortgage loans or car loans, don't drag out your comparison shopping process. When inquiries happen over a shorter time period, the FICO calculation treats them as a search for one new loan, rather than as a search for many. One new loan won't lower your score, but several will.
Finally, remember that closing an old account will not raise your FICO score or remove delinquencies or negative items from your report. If you've hit some rough times that impacted your score, your best strategy is to start demonstrating a pattern of on-time bill paying and debt reduction. Raising your score significantly often requires an overhaul of your spending and budgeting habits; but, given the potential financial benefits, it should be well worth the effort.