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Tags: finance, credit tips, how to improve your credit score
 Your credit score has an integral function in your financial life. Your score, determines if you will be able to get loans and at what interest rate. All creditors will look at your credit score when they go over your loan application. Obviously, the higher your grade is, the lower the interest rate you will be paying, be it on cards, loans or mortgages.
And it’s not just lenders that look at your scores, even landlords and cell phone companies will look at it. This is because if they see that you’re not good with finances, you might not be a good tenant or subscriber. In that case you need to know how to improve your credit score.
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If it’s low you need to raise your credit score, and if it’s already high then you need to keep it there. In order to improve your scores if necessary, you first need to know where you stand—that’s the number between the credit score range of 300 and 850. See what the top three credit bureaus—Equifax, TransUnion and Experian—have to say about you.
Since creditors typically report to the bureau to which they also subscribe to, your credit report and history may be different for each one. Check your report and history thoroughly to make sure there are no mistakes. Remember, the three bureaus create your report and history based on the information that they themselves receive from your creditors—basically they don't really verify the information that they get.
And if you do find an error make sure you document it and dispute it with them. A bad report is the difference between being able to get a loan at a good rate or not—that means it’s going to cost you money. If the report and history is accurate then it’s really up to you to change any negative information on it—late payments, low limits, etc.
It just takes time and discipline in you spending habits. Make sure that you’re paying your bills on time. Timely payment is one of the biggest factors that affect your credit score. Even if you’re just sending the minimum payments, don’t send it in late. Also, try to pay down the balances on your cards since your debt to card limit ratio—the amount that you owe on your cards as a percentage of your card’s limit—is another big factor that affects your credit score.
The lower the ratio the better it is for your score. At the same time you are paying down your balances, contact your card provider and see if they can’t increase the limit on your card. If they are able to, just make sure you don’t use it. It does defeat the purpose of why you asked for the limit increase.
And if you have a card that has been with you for a long time, but haven’t used because you have better offers, don’t cancel it. This is because the longer the history of your account, the more confident a lender can be about your financial behavior. If you cancel any unused old cards, their history will be taken out of from your record.
Keep the old cards along with their history, use it once in a while, always making sure to pay off the balance every month. And while this is a small percentage of your credit score, having a lot of cards is not a good thing. If lenders see that you have a lot of cards, they may typically surmise that you may get in way over your head in debt.
And lastly, it can’t hurt to ask your card provider or lender to erase a late payment from your history. Some will, especially if you have a good record with them. The extra points you will get out of all this will make it worthwhile for your financial wellbeing.
About the author
The author of this article Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick recently published a book on how to manage your money and attract Wealth and Financial Freedom. More info on his Finance Planning course is available HERE.
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