5 Tips For Improving Credit Score
Bad credit is not only stressful but also costly. As bad as the situation is, however, the bad credit will not last for an eternity. In fact, there are steps you can take to improve your credit score. Here are some of them.
1. Review your Credit Card Report
Each year, you can get one credit card report from the top reporting agencies and even requesting one won’t affect your credit score. Take advantage of this free report and review it closely. If you notice any errors, make sure you dispute them. This is the easiest thing you can do about fixing your credit. It’s possible that your report could contain outdated or wrong information and when you notify the credit reporting agency of this anomaly, your score will automatically be improved the moment the erroneous information is expunged.
2. Eliminate credit card balances
One sure-fire way of improving your credit score is by eliminating nuisance balances. These refer to those small balances you may be having on your various credit cards.
One of the key factors that determine your score is the number of cards that have balances. This explains why charging $40 on one card and another $30 on yet another card instead of just using one card is sure to hurt your score.
Gather your credit cards with balances and pay them. After that, pick one or two cards and use them for all your needs. This avoids a situation where you pollute your credit report with numerous balances.
3. Don’t remove old debt from your report
So you just finished paying that mortgage off and you are calling credit reporting agencies to remove your details? That is shooting yourself in the foot.
Good debt, which means that you have paid off as agreed, doesn’t hurt your credit report. It actually helps your score.
Just leave it there on your report for as long as it takes because this actually improves your credit score. Trying to have the record of your good debt removed is akin to scoring ’ in school and then trying to have the record expunged after 15 years. That is something you should never allow to be deleted from your history.
4. Debt Consolidation
Although enrolling in a debt consolidation program may temporarily lead to a drop in your credit score, but the truth is that, provided you make onetime payments, your score will quickly improve and you even eliminate the debt which got you in problems to start with.
5. Pay your bills on time
As much as you are saving for that one big purchase, do not let this get you into a habit of late payment of your bills. It’s very important to ensure that you make month-by-month on-time payments. If you are late on your bills, it will affect your credit score and it won’t matter how much you have saved.
Having a bad credit history could very easily hamper your dreams of owning that nice car. Even if you do find a lender, it’s usually more costly. Therefore, it’s in your best interest to take steps to improve your credit rating. The above are some tips to help you improve your credit score.