Free credit score tips

With the peak home-buying season kicking off, savvy buyers will be scouring newspapers, checking the Internet and pounding the pavement, not only for the perfect house, but also for the best mortgage rate.

Shopping around is important, but it shouldn’t be the only strategy for getting the lowest interest rate.

Just as crucial is making sure your credit report is in good shape.

“Lenders view your credit rating as your reputation,” said Lucy Duni, director of consumer education for TrueCredit.com, a Web site run by the national credit rating bureau TransUnion.

People with the highest credit scores get the best rates, while those with the lowest scores may not even qualify for a loan.

Ideally, you should begin steps to spruce up your credit report at least three to six months before applying for a mortgage.

That should give you enough time to dispute any errors in your files and to change or avoid some behavior that could be damaging to your scores.

Overall, the best ways to protect your score are to pay your bills on time — even if it’s just the minimums — and to keep your credit card balances low.

If your cards are bumping up against their limits, paying them down to under 35 percent of your available credit will boost your score.

For example, if the limit on your card is $10,000, make sure the revolving balance is below $3,500.

You also should avoid making too many credit applications prior to going for your mortgage.

That means passing up those enticing offers to open a store credit card for an instant 20 percent off your purchases.

Each time you apply for a card, it triggers an inquiry into your credit history, lowering your score by up to 12 points.

Duni said, is closing old credit card accounts.

People with bad credit may think they can improve their scores by closing all their accounts, but the reality is that doing so actually could be damaging because it would wipe out the person’s credit history.

“The biggest factor in a healthy credit score is a long, healthy credit history,” she said.

Dumping a long-standing account could hurt your score by lowering the average age of your remaining accounts.

“Think twice about closing your oldest account,” Ms.

Under federal law, you can get a free copy of your credit report once a year from each of the main credit bureaus, Experian, Equifax and TransUnion.

Otherwise, you’ll have to pay for them.

The free reports are only available at a central Web site, www.annualcreditreport.com or by calling 1-877-322-8228.

You’ll want to see reports from all three bureaus because their records and scores usually differ.

Review the reports for any errors that might be bringing down your score.

For instance, you may see a late payment on a bill that you know you paid on time.

In that case, file a dispute to fix it.

The law doesn’t entitle you to get your credit scores for free, so if you want to see those, you’ll have pay for them.

(Mortgage lenders are required to give consumers their credit scores obtained as part of the application process, but by then it would be too late to do anything to change them.)

The cheapest way to get your credit scores is to order them at the same time you are requesting your free annual credit reports.

Consumer groups recommend getting what is known as a FICO score, which ranges from 350 to 850 points, because it’s the score most creditors rely on.

Equifax is the only bureau that sells FICO scores to consumers.

With the other bureaus, you get a proprietary score.

If you want FICO scores from all three bureaus, you can buy them at myfico.com from Fair Isaac Corp., the company that developed the scoring system.

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