Your3.com CREDIT REPAIR Credit Score Free credit report

1. Know Your Credit Score

As lenders shore up credit risk, the criteria for what is considered an excellent credit score are changing. In the past, a credit score above 720 was considered a good credit score, and would be sufficient to get you approved for credit cards or loans with the best terms. In today’s lending environment, aim for a credit score of 750-760, if you are planning to apply for a new loan or a credit card with good rewards and rates in 2010.

To find out where you stand at the start out the New Year, pull a free copy of your credit report from AnnualCreditReport.com if you have not done so recently. You are entitled to a free copy once a year. To find out what your credit score is, pay the $8-12 additional charge required, or alternatively, use this handy FICO Score Estimator from Bankrate.com.

2. Bolster Your Credit Limits

In 2010, credit card companies will continue to drop cardholders that don’t contribute to their bottom line. That includes both cardholders that are considered risky, because of their credit score or borrowing profile, as well unprofitable cardholders, i.e. those who never use their credit cards.

To avoid being singled out for account closure or a credit line decrease, use all of your credit cards regularly, e.g. by cycling through them every two or three months. Avoid using all your cards in any given month; this makes payments tricky to manage and increases your risk of late payments and penalty fees. Instead, pick one or two cards to use for one month, then move on to another one to two cards, and so on. Synchronize the due date for all your credit cards, so you don’t have to constantly keep track of when different cards are coming due.

3. Watch Your Credit Utilization Ratio

While most people know that they need to pay their bills on time to keep their credit score high, most are not familiar with how to optimize the credit utilization component of the credit score. Yet, this important ratio makes up a full 30 percent of FICO scores.

The credit utilization ratio is the ratio between the total credit limit available on all your credit cards and the total amount of outstanding balances. If you use up a large portion of your available credit, lenders view it as an indication of financial distress, and this dings your credit score. In short, the more credit card debt you have relative to your total credit available, the higher your credit utilization ratio, and the lower your credit score.

Your credit utilization ratio will not just affect your credit score, it will also put you at higher risk for credit limit cuts. If credit card companies see that you’re using up much of your available credit, they will consider you a high-risk cardholder and will be more likely to single you out for a credit limit decrease.

To determine your credit utilization ratio, read through your credit report and total the amount of credit you have available (if the information listed in the credit report is not correct, be sure to correct it (see below)). Then total the revolving balances on your credit cards. Divide the total debt outstanding by the total credit limit to arrive at your credit utilization ratio. To have the best effect on your credit score, the ratio should be below 30 percent, and preferably at 10 to 20 percent.

4. Monitor Your Credit Report

Regularly look through your credit report to make sure all your credit cards all still open. Card issuers have been closing accounts left and right, and they don’t have to give cardholders notice of the cancellation. If a credit card with a high limit has been cancelled, call the card issuer and ask to get it reinstated. Many will oblige you if you have been a good customer in the past. Be sure to explain that you plan to use the card more actively in the future. Similarly if a credit limit has been cut, call the credit card company to inquire why, and ask what you can to get the credit limit back or at least increased.

by Karin Price Mueller

Monday August 31, 2009, 8:00 AM

Q: I checked my credit report and saw an inquiry from the hospital system where my wife recently gave birth. What’s the purpose of a credit inquiry by a health care provider?

Could someone be denied care based on their credit report/credit score?

– Surprised Patient

A: Congratulations on your growing family.

No one can check your credit report or credit score without your permission. When you brought your wife to the hospital, paperwork was probably the last thing on your mind.

“When you signed the paperwork for the hospital admittance you also signed an authorization for the hospital to perform a credit check,” said Reed Fraasa, a certified financial planner with Highland Financial Advisors in Riverdale.

If you don’t regularly read the fine print, there have probably been many other times you’ve given permission for a credit check without realizing it. At a hospital, though, the use of your credit information has nothing to do with the care you will receive.

“Hospitals are allowed to pull your credit reports and credit scores but only under the provisions of the Fair Credit Reporting Act (FCRA), more commonly referred to as ‘Permissible Purposes,’” said John Ulzheimer, president of consumer education at Credit.com.

Ulzheimer said they do not use the information as a determining factor to grant or deny care but they can and do use it to determine your likelihood of paying them back, especially if you have an unusually high deductible or are paying out of your pocket.

Essentially, he said, they are granting you a form of credit and they want to know whether or not you’re going to pay them back, just like any other creditor.

There is a fairly vocal and uninformed minority that believes credit reports and scores are used by hospitals to determine whether or not to provide care.

“That’s absolutely untrue and does more to terrify potential patients than it does to set the record straight,” Ulzheimer said. “Credit data is used by their receivables departments simply to identify, after care has been provided, who is likely and who isn’t likely to pay.”

No matter your score, Fraasa said you won’t be denied care, in part because of the Hippocratic Oath. It says, among other things, that the health of a patient will be a doctor’s first consideration, and that doctors won’t permit considerations of age, disease or disability, creed, ethnic origin, gender, nationality, political affiliation, race, sexual orientation, social standing or any other factor to intervene between the doctor’s job and the patient’s needs.