5 Ways How to Improve Your Credit Score
Having a good credit score can have a significant impact on your life. Today I want to give you 5 ways how to improve your credit score.
Improving your credit score can save you thousands upon thousands of dollars over the span of your lifetime. Unfortunately, your credit score tells the financial world about your credit worthiness.
Ways how to improve your credit score quickly
1. Get a Copy of Your Credit Report
First and fore most you need to obtain a copy of your credit report so that you can analyze it for accurateness as well as areas that need correcting. There are credit agencies out there that can assist you with difficulties you may be having with your credit report and scores.
You can attain your credit report from any reputable credit agency. In most cases this can be free if you were recently denied credit during an application process.
The top 3 are Transunion, Experian, Equifax. Below is some information on all 3.
- Equifax – www.equifax.com. P.O. Box 740241. Atlanta, GA 30374-0241. 1-800-685-1111.
- Experian – www.experian.com. P.O. Box 2104. Allen, TX 75013-0949. 1-888-EXPERIAN (397-3742)
- TransUnion – www.transunion.com. P.O. Box 1000. Chester, PA 19022. 1-800-916-8800.
2. Pay Bills on Time
It sounds so simple, yet millions of Americans have poor credit due to late payments. For one reason or another, many people find it difficult to pay bills on time and the effects of that is detrimental.
Read this recent article from Credit Karma about how late payments can affect your credit.
Essential dates when your monthly payments are due should be noted, by this you will be able to make it a routine or pay your bill earlier.
Not paying on time would make your creditors file a report of missed or late payment to your credit card agencies and those red marks drops your score dramatically. Here is a chart that describes the credit score ranges.
3. Reduce Your Credit to Debt Ratio
Another one of the great ways how to improve your credit score is to ensure to keep your credit to debt ratio in check. Your credit ratio determines your ability to pay back a loan. It might be difficult to make a repayment obligation if your total debt outweighs your income.
Lenders are always interested in your credit to debt ratio because it gives them an indicator if you are a good credit risk.
4. Obtain New Credit Wisely
To maintain a good credit score, you must search wisely and comparison shop before you so freely complete a new credit application.
Remember, each loan application affects your credit score because even if you get approved you have just created a new credit inquiry.
5. Leave Any Old Debt On Your Credit Report
It is true that old “bad” debt can hurt your credit score but most of that will disappear off of your credit report in 7 years.
But some people want to remove credit accounts off of their credit report as soon as they are paid in full. This is a bad idea.
History is important when it comes to your credit score. The more of a history you can show when it comes to good debt the better.
Having a solid repayment record increases your score tremendously. Creditors love to see that you have paid off accounts in full without any skipped payments.
Unfortunately, we live in a society where credit is King. You are sometimes judged based on your credit worthiness. Therefore, it is important to consider the many benefits that come from having a good score.
It does take discipline and diligence to learn ways how to improve your credit score but it is well worth it.
You will save thousands of dollars yearly by having a good credit score versus someone that does not.
Learning ways how to improve your credit score can literally save you thousands of dollars each year. It can be considered a way to give yourself a raise immediately.
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Please leave a comment below and tell me your thoughts about these ways how to improve your credit score.