Improve Credit Score - 3 Tips for Raising a Low Credit Score
Raising your credit score does not involve a lot a work. However, there \r must be a willingness on your part to use credit responsibly. A low \r credit score makes its more challenging to obtain a credit card or get \r prime rates on a home or auto loan. On the other hand, a high credit score \r presents many finance options.
Check Credit Reports for Accuracy
Credit report errors are very common. It’s recommended that all \r consumers examine their reports twice yearly. This way, if any errors or \r mistakes are reported, you can quickly identify them and fix the problem.
For example, some creditors may accidentally report an account being \r past due or unpaid. Usually, common mistakes are easy to correct. \r However, if you do not start a habit of checking your report, the problems \r will go undetected, and can potentially lower your credit score.
It helps to obtain a copy of your report from all three bureaus. This \r provides an accurate credit standing. Also, it’s suggested that \r consumers review their credit before applying for a home loan or auto \r financing.
Pay Bills on Time
Never underestimate the value of making timely payments to creditors. \r Being habitually late on a credit card payment will greatly reduce your \r credit score. Moreover, this bad habit can result in raised interest \r rates. If possible, mail payments to creditors several days before the \r due date. This ensures payment reaching the creditor on time. If you have \r a difficult time submitting timely payments, consider setting up \r automatic payments.
Decrease Credit Card Balances
Credit card balances account for approximately 30% of your total FICO \r score. Thus, reducing balances is a quick way to significantly increase \r your credit score. To begin, keep credit card use to a minimum. Avoid \r shopping sprees and spending money frivolously. Attempt to keep balances \r below 25% of the credit limit.
Once you have successfully reduced or eliminated credit card balances, \r avoid accumulating additional debt. It may help to payoff balances each \r month, or establish a spending limit. It’s tempting to close paid off \r accounts. Although these appear to be a smart credit maneuver, closing \r accounts will shorten credit history, which lowers credit score.
View our recommended sources for a free instant credit report.
Also check out our recommended online companies to help you with credit card debt problems, or view our recommended lenders for debt consolidation mortgage refinancing online.
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