10 Easy Steps to Improve Your Credit Score
Something that should be taught to kids in high school is the importance of their credit score. I’m no banker or educator, but my guess is that if kids grew up learning the importance of this number, they’d be better prepared for a solid financial future. I believe schools think that parents will teach their kids this information, and many do not. Some kids don’t know anything about their credit score until they’re adults looking to buy a house or car and they’re told that they just can’t do it because they used all those credit cards and ruined their credit before they even had time to establish a score. It’s a shame, really. But fortunately, you can improve your credit score. You can do it in a timely manner, but understand that it’s not fast. You’re not about to improve your score overnight, but you can improve it significantly and in less time than you might think. The higher your score, the more likely you are to be able to apply for loans, car notes and other things that are of important assistance to you. We can provide you with some helpful, easy tips that will raise your credit score slowly but surely.
Check Your Credit
The most important thing you can do for your credit score is check the score once or twice a year. This is going to allow you to see what is happening, where you stand and what you need to do. It’s also going to allow you to make sure there are no mistakes on your report, which could lead to serious financial trouble.
The former brings us here; if there are mistakes on your credit report, get them fixed right away. Call card issues, offer proof and call the credit bureau to file a complaint. The faster you do this, the better off you will be and the faster your credit score will go up enough so that you have a much more positive account and number to your name.
Pay On Time
Don’t make any late payments. Even just one late payment can affect your score in a negative manner, and that can mean that you are stuck with a lower score and bigger debts. Be very careful to pay on time, and perhaps you should consider doing something like paying online in advance so that you aren’t waiting on the mail to be delivered and checks to cash, too.
Pay Down Debts
If you owe money to creditors, work very hard to pay that money off and get those debts paid down. The lower your debts, the higher your credit score. Your score is partially determined by the amount of debt that you have, and if you have a lot in comparison to how much you have available, you are not looking favorable in the eyes of the creditors that want to issue you money – or don’t want to issue you money – in the future.
Don’t Make Frequent Inquiries
One thing that does often have a huge impact on your credit score is the number of inquiries on your account. This means that you need to stop applying for store cards in hopes that you get that big credit card discount. This is true even if you never use the card, never activate it or even cancel it before you have the chance to use it. The more people check your credit, the lower your score will be. Do yourself a favor and stop applying for credit all the time so that your score will go up instead of down.
Negotiate Your Issues
Do you have some credit issues on your account? Did you know you can negotiate those? For example, you can go ahead and ask a creditor to whom you made late payments while you lost your job to erase that from your record, and you can ask to have things changed on your record? Now, this does not mean that your creditors will do this for you, but you don’t know until you ask. And some creditors might be willing to do it because you worked with them, first. Say you called a creditor when you lost your job and explained to them that you lost your income and cannot pay your bill while you look for a new job. This is not something they loved, but they are probably happy that you kept your word, worked with them and have since paid off your account. They keep track of this stuff, and they might be willing to go to bat for you to help you now.
Get A Credit Card
The most important thing you can do is have a credit card to your name. You will need it to make certain purchases, and you will need it to keep your score high. Credit bureaus will check to see that you do have available credit to your name, and they will see that you are paying that credit regularly and that can help your score go up significantly.
Use Credit Wisely
Never use your credit poorly. Use it for a few small purchases a month and then pay it off in full. You can’t just have a card you’re not using since you do want to use it and pay it off to show the credit bureaus that you are making good, positive choices. However, you do not want to use more than 30% of your available credit limit so that you can keep your debt-to-available credit ratio low. This just happens to be the favorable limit.
Don’t Cancel Old Accounts
Some people make this mistake and they can ruin their credit score. If you have more credit available, your current debt looks much smaller. However, if you close out old cards you paid off years ago, you’re going to cause your available credit limit to drop and make your debt look larger. This is not going to do your credit scores any positive favors, so keep the cards open and just hide them somewhere.
While this is technically not going to raise your credit score personally, it will help. Be smart about your spending. Create an emergency fund so that you don’t have to rely on credit cards when things come up. Be wise with your money, spend less than you make and don’t apply for credit for everything you want; wait until you have the cash to pay upfront.
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