If you have an understanding of the procedure that what is considered during calculating your credit scores, you can easily follow those steps to raise/restore your credit scores. In this article I am going to share with you the same factors only, so that you know all the regulations. Hence, it will be far easier for you to restore a high score or even to stop from getting an even lower score especially when you are wondering to get approval for a new car or home loan etc.

Most Recent Late Payment Items: This creates the most damaging effect on your credit score rating. The recent late payments are usually taken as the mirror of your current financial position no matter what so ever excuses you have in your bag for the late payment. It is like no matter how much a student has studied whole year but if he fails in the final examination, he is considered Fail. Many things like credit card late payments, personal loans, student loans, car payments and mortgage loan delays collectively work on lowering your over all credit score. Mortgage loans are very important and have the most adverse fact on the credit score if not handled properly. If you want to restore your credit score, it is always advisable to you to take special care of your mortgage loans if any, and avoid late payments of that. A single mortgage loan is capable of lowering your scores as far as 100 points.

Collection & Charge Off Accounts: The written off accounts by creditors are better known as charge off accounts. Believe it or not they too are capable of damaging your credit scores and your efforts of restoring your credit score. Collections or charge offs which are more recent, they do more damage as compared to the old ones. Avoid them at every cost as they will also bring down your credit score and the efforts to restore your credit scores.

Debt Ratio: Carrying high credit limits too can have an adverse affect on your credit scores. The lower you use your credit limit, more sound your financial situation will look like and hence, you will surely have a high credit score. For example if your credit limit is $ 5000 and you are consuming $ 4500 out of it, this gives the credit scoring system a signal that you are reaching your limit and as a result , your scores are penalized.

If you keep in mind all the above mentioned features, you can easily restore your credit scores to new heights. It is always advised that please take a good look at your credit report and make sure that all what is mentioned is actually owned by you. Also check for duplications. Always remember that even the best of the credit reports can be full of errors so cross checking is always a good idea. One single error can make you pay heaps more.

Source by Eddie Delgado