Credit repair tips - Tips for Improving Credit

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We often get advice on how to maintain healthy credit from coworkers and relatives. But when it comes to the facts about credit, we're providing you the top tips for improving credit health. Although there are no credit repair tips that can erase your credit history, there is action you can take that can improve it. There are a wide variety of myths floating around about what you should and shouldn't do to improve your credit reports and credit scores. TransUnian has exposed these urban legends to provide you and your informers with the truth about credit:

Tip 1 for improving your credit
False: Your score will drop if you check your credit
Fortunately, this one is definitely not true. Checking your own report and score is counted as a "soft inquiry" and doesn't harm your credit at all. Only "hard inquiries" from a lender or creditor, made when you apply for credit, can bring your credit score down a few points. Worried about damaging your credit while shopping around for a loan? Multiple inquiries for the same purpose within a short amount of time (a few weeks) are grouped together into a less damaging period of inquiry.
Credit Repair Tip: Check your credit often to make sure everything is accurate, and especially before making a major purchase. Don't worry, it won't hurt.

Tip 2 for improving your credit
False: Closing old accounts will improve your credit score
To close or not to close, that is the question. Many people advocate closing old and inactive accounts as a way for improving your credit. In most cases, closing accounts will actually have the opposite effect. Canceling old credit accounts can lower your credit score by making your credit history appear shorter. Think twice before closing the oldest account on your credit report. If you want to reduce your levels of available credit, ask for your credit limits to be reduced or close newer accounts instead.
Credit Repair Tip: If you've got credit cards that you don't use anymore, but have excellent credit history on those accounts, keep them open.

Tip 3 for improving your credit
False: Once you pay off a negative record, it is removed from your credit report
Negative records such as collection accounts, bankruptcies and charge-offs will remain on your credit report for 7-10 years after they are first posted. Paying off the account before the end of the set term doesn't remove it from your credit report, but will cause the account to be marked as “paid.” It is still a good idea to pay your debts, it can improve your credit score, but the major improvement will come when the record expires.
Credit Repair Tip: Pay off accounts that are negatively affecting your credit card immediately, so that it can expire quicker.

Tip 4 for improving your credit
False: Being a co-signer doesn't make you responsible for the account
When you open a joint account, co-sign on a loan or become an authorized user on someone's credit card, you are taking on legal responsibility for the account. Any activity on these shared accounts, good or bad, will show up on both people's credit reports. If you co-sign for a friend's auto loan and they don't make the payments, your credit profile will be hurt by their actions and visa versa. The only way to stop this double reporting is to refinance the loan or to have the creditor officially remove you from the account.
Credit Repair Tip: Don't co-sign for anyone unless you're prepared to take legal responsibility for the account if they don't pay.

Tip 5 for improving your credit
False: Paying off a debt will add 50 points to your credit score
Your credit score is calculated using a complex algorithm that takes into account hundreds of factors and values. It is very hard to predict how many points you can gain by changing one factor. For a person with a high credit score, just one late payment can cause a significant drop. If a person has a low credit score, it may not cause a large drop at all. There is no magical way to improve your credit score, just keep paying your bills on time, reducing your debts and removing negative inaccuracies from your credit report. Good financial behavior and time are the two most important factors on your credit score.
Credit Repair Tip: Pay bills on time to keep a good credit score.