ABC7 On Your Side: Credit scores

Having the highest score pays off not only in sports, but it is also true of your credit score. And there are many reasons your credit can take a hit.

If a credit card company lowers your limit, or if you charge more than 30 percent of your credit limit, or make late payments or skip a payment, your credit score could take a hit.

"You have to start paying those bills on time. You have to make sure you're not going out and applying for massive amounts of credit in a short period of time. And you've got to keep the balances on those cards as low as you can," said Steven Katz, True Credit.

Computers control that powerful three-digit number that determines whether you get a mortgage, car loan, or credit card.

Sometimes there are mistakes. Warren Crest found someone else's unpaid account on his credit report. Removing that error raised his score 128 points.

Part of the calculation for your score is the debt you have versus the amount of credit you have been approved for. So watch out for credit card companies lowering your limit.

"Lowered limits are done by a computer so if you can call and speak to a real human being, its very possible you'll get that reversed," said Elisabeth Leamy, GMA Correspondent.

Every time you apply for credit, your credit gets checked but too many credit inquiries can lower your score.

Always pay on time, even if it's the minimum amount. After eight to 16 months, you should see improvement.

Once a year, you can get your credit report for free, but you will need to pay one of the three credit reporting agencies to get your credit score.



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