California Bad Credit Loan - Focus on how to Raise Your Credit Score - Part 2

A good move is to convert as much revolving debt to installment payments at least 45 days prior to making a large purchase such as a car or buying a home.

Maintain 3-5 credit lines in order to establish credit, establish your ability to make monthly payments and to boost the amount of credit that lenders are willing to extend to you.

One way to begin to establish credit is to become an authorized signatory on a parent’s credit card. As long as the minimum balance is paid each month, the signatory’s credit will be established – even if they do not personally use the card.

Be able to access credit lines online or at least through monthly statements. This is especially true for student loans, which are notorious for being reported multiple times – creating the appearance that a borrowers monthly payment obligations are higher than they really are.

If you plan to make a large purchase or takeout a large loan, avoid checking your credit multiple times as this will slightly lower your credit score. The best move is to ask for a copy of your credit from a mortgage broker, for instance, if they are going to pull your credit. Each subsequent financial institution will accept your copy if it has been made within the last 30 days.

Length and Levels of Credit:

Both the length of time that you have had your lines of credit, as well as the amount of credit extended to you, will affect your credit score. Length of time is important for credit agencies as it reflects a stability in your relationship to creditors. This is why it is a good idea to hold onto credit lines that have high credit limits and have been open for many years as they look good to creditors and improve your ratio of revolving debt.

Levels of credit is important because it shows that you generate income -- the higher your income, the more credit will be extending to you. This may come in very handy when you are looking to make that first big house purchase.