Raising your credit
score does not involve a lot a work. However, there must be a willingness on
your part to use credit responsibly. A low credit score makes its more
challenging to obtain a credit card or get prime rates on a home or auto loan.
On the other hand, a high credit score presents many finance options.
Check Credit Reports for Accuracy
Credit report
errors are very common. It’s recommended that all consumers examine their
reports twice yearly. This way, if any errors or mistakes are reported, you can
quickly identify them and fix the problem.
For example, some
creditors may accidentally report an account being past due or unpaid. Usually,
common mistakes are easy to correct. However, if you do not start a habit of
checking your report, the problems will go undetected, and can potentially
lower your credit score.
It helps to obtain
a copy of your report from all three bureaus. This provides an accurate credit
standing. Also, it’s suggested that consumers review their credit before
applying for a home loan or auto financing.
Pay Bills on Time
Never underestimate
the value of making timely payments to creditors. Being habitually late on a
credit card payment will greatly reduce your credit score. Moreover, this bad
habit can result in raised interest rates. If possible, mail payments to creditors
several days before the due date. This ensures payment reaching the creditor on
time. If you have a difficult time submitting timely payments, consider setting
up automatic payments.
Decrease Credit Card Balances
Credit card
balances account for approximately 30% of your total FICO score. Thus, reducing
balances is a quick way to significantly increase your credit score. To begin,
keep credit card use to a minimum. Avoid shopping sprees and spending money
frivolously. Attempt to keep balances below 25% of the credit limit.
Once you have
successfully reduced or eliminated credit card balances, avoid accumulating
additional debt. It may help to payoff balances each month, or establish a
spending limit. It’s tempting to close paid off accounts. Although these appear
to be a smart credit manoeuvre, closing accounts will shorten credit history,
which lowers credit score.
Disclaimer:
This article is presented solely as an example and is not meant to replace
qualified financial advice. If you or someone you know require up to date
financial or legal help, seek qualified assistance. No content on this site
should ever be used as a substitute for direct legal counsel from your lawyer
or a qualified attorney.
Comments