7 Ways To Protect And Improve Your Credit Rating
Your credit score accounts for the amount of interest you have to pay for a loan or a credit card. Increasing your score in just a few points will make a big difference in the interest rate you will pay for a purchase.
If your credit score is high enough, you’ll have no problem qualifying for a lender’s best rates and terms on auto financing, home loans and small business loans.
The following are a few tips about how you can protect and improve your credit rating.
1 - Order Your Credit Report.
Your credit score is based on your credit report, so you should begin by ordering your reports and reviewing each one for accuracy.
You can get your reports from a service such as MyFico.com, or order from Equifax, Experian and Trans Union separately online or by phone.
2 - Check Your Credit Report Information for Inaccuracies.
Check the identifying information for name, social security number, birth date and incorrect address.
Make certain that old negatives and paid-off debts are deleted.
Check for accounts and delinquencies that are not yours, late payments, charge offs, lawsuits, judgments or paid tax liens older than seven years old.
Also, paid liens or judgments that are listed as unpaid, duplicate collections, bankruptcies that are older than ten years and any negative information that is not yours.
3 - Always Pay Your Bills on Time.
Payment history makes up more than a third of the typical credit score.
If you paid bills late in the past, you can improve your credit score by starting to pay your bills on time.
Lenders are looking for any sign that you might default, and a late payment is a good indicator that you are in financial difficulty.
4 - Keep Credit Cards Balances Low.
Carrying smaller balances is the best way to increase your credit score.
The score measures how much of your limit you use on each credit card or other line of credit, and how much of your combined credit limits you are using on all your cards.
Within 60 days, paying down credit card balances can increase your credit score by as much as 20 points.
5 - Try Not to Open In-Store Credit Cards.
Although your first credit accounts can serve to build and improve your credit history, there comes a point when each subsequent credit application can reduce your score.
New credit cards reduce the age of your credit history, and a department store credit card isn’t good evidence of credit worthiness.
Every time you apply for a retailer’s credit card your credit store gets dinged.
6 - Be Conservative When Applying For Credit.
Having at least one credit card that’s more than 2 years old can help your score by 15 percent.
Make sure that your credit report is checked only when necessary. Or, if you are shopping for a home, try to apply for loans within a two-week period.
By keeping the loan process within a two-week period, all of the credit report lookups are seen as one single request.
7 - Don’t Close Credit Cards or Other Revolving Accounts.
Shutting down unused accounts that have outstanding balances without paying off the debt changes your “utilization ratio,” which is the amount of your total debt divided by your total available credit.
It will reduce the gap between the credit you are using and the total credit available to you, and that can hurt your credit score.
Learn more here in my section explaining all about loans and credit cards guide to help you get rid of debt and prevent further financial crisis.
What’s your biggest issue? How do you handle it – or can you think of any additional tips you can share with others if you don’t have an issue with this in your life?
Share them with us below – and then share this blog post on Twitter or Facebook or wherever you feel it could help someone you know.
Click here to post comments
Join in and write your own page! It's easy to do. How? Simply click here to return to Money Matters.
"Power Tips" weekly magazine is back!
You Get A Free Complete Self Help Report delivered to your email box every week, plus you get a free PLR article and other great gifts!
SUBSCRIBE BELOW ... I promise you will want to USE what you learn every week!
I really want to know what you think of this site, this page, and to hear your tips or suggestions about it.
So please share your story or simply add a Comment in the comment box.
If you feel that the information on this page has been useful to you please give it a Like or share it with your friends - thanks!!
"You are a life Saver!!
I recently discovered this site and I can tell you that my life
has not been the same. I now come here EVERYDAY and spend at least 1
I used to spend that time browsing online fashion and beauty
magazine which just means that I spend more. Now I have replaced that
habit with coming here.
In future I will think about contributing articles as well. Thank you! Thank you!! Thank you!!! and God bless"