One of the most frustrating experiences is being turned down for a loan because of your credit score. Your
ability to borrow money
isn’t the only thing affected by your credit score, though. Insurers
might use your credit score to determine your premiums. A low score
could mean that you pay more in premiums. Others, including Internet
service providers and landlords, might be interested in your credit
score as well. Knowing how to improve you credit score can help you save
money in the long term.
Indeed, more and more, your credit score is being used to make
judgments about your ability
to handle your finances. If a low score seems to indicate that you are
irresponsible, it will be difficult for you to take advantage of the
best offers and loan terms in the world of finances. If you are
wondering how to improve your credit score, here are some things you can
do to boost your financial reputation:
Pay Down Some of Your Debt
One of the items that shows up on your credit report is how much debt
you have. If you are using most of your available credit, it counts
against your credit score. You can look as though you are in a better
position by
paying down some of your debt.
Keep your credit card balances to less than 30% of your credit limits.
This way, you’ll appear more able to handle the credit that you have.
Get Current on Your Bills
If you have fallen behind on some of your payments, catch up. Your
credit report contains a record of each month’s payment history. When
you are on time each month, it shows. When you miss a payment, your
credit report reflects the number of days you are behind. If you have
some accounts you are behind on, bring them up to date so that your
on-time payments can begin overwhelming the negative items. The longer
you go without missing a payment, the better off you’ll be — and the
higher your credit score will be.
You should understand, though, that paying off a collection account
won’t remove it from your credit report. It can remain on your account
for years. It’s better, though, for the account to be shown as paid off,
rather than still open.
Maintain Good Credit
Once you have managed to improve your credit score as much as you
can, it’s up to you to maintain a good credit score. The truth is that
excellent credit is achieved only after months — or years — of
consistently credit-positive behaviors. One of the best ways to maintain
good credit over time is to make on-time payments. Be sure to pay on
time and in full each month. You can set up payment reminders, or have
your bills automatically deducted from your account. That way, you don’t
have to worry about paying late.
Also, be aware of the length of your credit history. Your credit
score takes into account how long you have had credit, and how old your
accounts are. Don’t close older accounts because that can reduce the
length of your credit history — and drop your score. Be wary, too, of
opening new accounts. Too many newer accounts can also damage your
score. Be selective of the accounts that you open, and carefully
consider which accounts to close.
Fix Errors on Your Credit Report
Your credit score is based on information reported in your credit
file. In the U.S., you are entitled to one free credit report each year,
from each of the major credit bureaus, by visiting
www.annualcreditreport.com.
You are also entitled to a free credit report whenever you are rejected
for a loan based on information in the report. In Canada, you can write
in to receive a
free credit report by mail. And, of course, you can always pay a fee to access your credit file.
When you locate a mistake, go through the process of
disputing the error so that it is fixed. When negative errors are repaired, your credit score often benefits.
With a little planning and responsible behavior, you can improve your
credit score, and find a variety of opportunities opened up to you.
source:
financialhighway.com
