Raise Credit Score | How to Improve your Credit Score
Are you aware that a poor credit score can:
- Prevent you from applying for a job - employers often check credit reports before hiring, especially in the financial industry or if you will be handling money
- Starting a business - you will be ineligible for trade lines from suppliers or credit lines from a bank
- Obtain utilities in your name - cable, telephone, electric and gas companies may require a co-signer, or require a hefty “deposit” upfront
- Buy a house or rent an apartment - bad credit will mean a higher interest rate or a larger security deposit
The following steps and advice will show you how you can raise credit score or improve your credit score.
Improving Credit Score
- Always, and I mean always, pay your bills on time. Paying the minimum amount due on credit cards will help you avoid late fees - but you should always pay more than the minimum due, better yet you should pay off the entire balance if you’re able. Also send in your payments BEFORE the due date, to avoid late payments. Here’s an automated checking and savings account that will help you make those payments on time
- Get a copy of your credit report. You need an accurate picture of where you currently stand credit wise. The only way you can do that is by obtaining your credit score for a fee from the three major credit bureaus, along with copies of your credit reports. Yes you can obtain your credit reports from free from the federal government sanctioned website www.annualcreditreport.com - but your credit reports will not contain your credit scores. The best way to obtain your credit scores from all three bureaus along with your credit reports is from MyFico. Click here to get your reports and credit scores from MyFico
- Check your credit reports for errors. If you find any incorrect information, such as wrong names, wrong account numbers, wrong addresses, wrong loan amounts - you should dispute these items and have them removed.
- Close all your old accounts. If your credit report shows an account that you no longer have a credit card for, call the credit card company and ask them to close that account. Do not cut up or throw away any existing credit cards! You need that credit history.
- Reduce your debt to income ratios - as a rule of thumb, do not use more than 35% of your available credit limit
- Keep your balances low - better yet always try to pay them off in full and avoid carrying balances from month to month. The balances you carry over are costing you in terms of the interest you pay
- Consolidate your credit card debt and move them to a lower interest rate card
- Stop applying for more credit cards
- Ask your credit card companies to correctly report all your accounts to the credit bureaus. Some credit card companies do not report your accounts to the credit bureaus, and this will have a negative impact on your credit score because it will seem like you are using more credit than you really are.
- If you know that you will have some difficulty making an upcoming payment, contact the creditor beforehand and work something out. Coming to an arrangement with your creditor will help you preserve your credit rating. A number of creditors have programs to assist you - but you have to ask for assistance.
All the steps above can be completed under a month and you should notice a considerable increase in your credit score.
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