Our insider secrets

Three years ago, a credit score of 580 was good enough for you to earn approval for a wide range of attractive mortgages and other loans. Today, borrowers need scores well into the 700s (out of 850) to obtain similar terms.

Achieving these top-tier credit scores is tough enough when the system is fair. Often it isn’t. Harmful practices by retailers and credit-reporting agencies can keep you from earning your rightful credit score. How to protect your score…

Decline all offers from stores that say, “No payments until… ”

Reason: Retailers typically team up with third-party finance companies to make these offers. They are the same finance companies that make high-interest-rate loans to high-risk borrowers. If one of these lenders is listed on your credit report, the scoring models that calculate your credit score might lower your score — even if all you did was accept an offer to delay payments on a flat-screen television or a coffee table.

Do not apply for more than two or three credit cards, including store cards, within any 12-month span.

Reason: Each credit card you apply for, including store cards, posts a credit “inquiry” on your credit report. Make more than a few inquiries within a few months — which often happens around the holidays when consumers take advantage of special card offers — and your credit score might fall. These inquiries will continue to affect your credit score for 12 months.

Before you agree to become a customer, ask small lenders, cellular service providers and utilities whether they report on-time payment of bills to credit bureaus. If you have a choice of which company or lender to use, lean toward those that do report, so your responsible use of this credit counts in your favor.

Reason: With many credit card issuers, even when you act responsibly, you are not rewarded — yet when you make even a small mistake, you are punished. Because many utility companies, cell phone service providers and small lenders, such as credit unions, don’t bother to report on-time payments to any of the credit bureaus, they deprive their customers of an opportunity to improve their credit scores. But, if these customers default or their bills are turned over to a collection agency, that is reported, generally through the collection agency assigned to recover the debt.

Check your credit report for mistakes six months before applying for an important loan.

Reason: If you find an error on your credit report that is lowering your score, you can contact the credit bureau and correct the problem in time. If you don’t check, when you apply for the loan, you may discover that your credit score is unfairly low.

No matter the mistake, it takes up to 30 days for credit bureaus to update credit reports. Best: Check your credit report with all three credit-reporting bureaus — free — once every 12 months. You can also purchase your credit score when you get your free report.

When a customer service rep agrees that a late or missed payment notice was in error, ask to be sent confirmation to this effect on company letterhead. This statement should note your name, account number and the date of the bill in question. If the erroneous late or missed payment later appears on your credit report, you can send copies of this statement directly to the credit bureaus.

Reason: Even when a lender agrees that it was wrong to accuse you of a late or missed payment, the lender may still report the problem to a credit-reporting agency. The customer service reps who correct the billing mistakes might lack access to the automated system that reports late and missed payments to credit bureaus.


  • Use only a small amount of your available credit. Your credit score will suffer if you use more than 10% of your available credit on a particular account or among all your accounts.
  • Vary your credit. It’s important to your score that you have many different types of credit, including several of the following: Credit card, retail store card, gas card, auto loan, home loan, student loan and personal loan.
  • Do not close old accounts. The older your credit card accounts, the better for your credit score.

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