Advice on How to Increase Your Credit Score
- By Stuart Hunter
- Published 08/20/2009
- Finances
- Unrated
Stuart Hunter
Providing credit repair services since 1991, Lexington Law has helped over 500,000 clients legally take on their credit and backs up the claim that they are "the trusted leaders in credit repair."
View all articles by Stuart HunterImproving Your Credit Score
Millions of adults throughout this country contend with the realities of having a bad credit score. Some are turned down for credit cards or car loans, others learn their applications for mortgage refinancing have been rejected. If you're dealing with the restrictions that get imposed on people with poor credit, you may already know your credit reports are in need of repair. These days, getting information about what you can do to fix your credit score doesn't need to be frustrating or stressful, thanks the abundance of credit resources available to consumers.
* Pay your bills on time - Your payment history makes up 35 percent of your credit score. Missing multiple payments can cause your score to drop but since the effect of a late payment diminishes over time, focusing on making all payments on time from today on will get your score moving in the right direction.
* Try to keep low balances on your credit cards - Outstanding debt makes up 30 percent of your credit score. The closer you are to reaching the limit on your credit cards, the
less stable your finances will appear. Keeping credit card balances below 30 percent of the limit will make your credit utilization ratio look better which will be reflected positively in your credit score.
* Avoid shifting your debt on numerous credit cards - Transferring debts to a low interest rate card is a solid strategy when trying to pay down debt, but a history of moving balances between cards looks like you are robbing Peter to pay Paul instead of being able to make your monthly payments.
* Carefully study loan or credit applications before accepting them - Some loans, including retail store lines of credit, are loaded with strings attached that can end up causing big problems down the road. For example, some no payment, no interest financing programs offered by retailers include rates that can skyrocket if you are late on a single payment and clauses where you may still be responsible for interest accrued during the "no interest" period.
Lastly, for people who need additional assistance addressing their bad credit, an excellent resource for consumers are professional credit repair services. Professionals can lend their valuable expertise on important matters like disputing the questionable negative items on your credit report and specific steps you may be able to take to make the most of your credit.
Tips to Improve Your Credit
Credit scores are an important tool used by lenders to determine the likelihood a borrower will repay their loan. Fortunately for those with lower credit scores, this rating is not set in stone. It can take time, but there are many ways you can increase your credit score.* Pay your bills on time - Your payment history makes up 35 percent of your credit score. Missing multiple payments can cause your score to drop but since the effect of a late payment diminishes over time, focusing on making all payments on time from today on will get your score moving in the right direction.
* Try to keep low balances on your credit cards - Outstanding debt makes up 30 percent of your credit score. The closer you are to reaching the limit on your credit cards, the
* Avoid shifting your debt on numerous credit cards - Transferring debts to a low interest rate card is a solid strategy when trying to pay down debt, but a history of moving balances between cards looks like you are robbing Peter to pay Paul instead of being able to make your monthly payments.
* Carefully study loan or credit applications before accepting them - Some loans, including retail store lines of credit, are loaded with strings attached that can end up causing big problems down the road. For example, some no payment, no interest financing programs offered by retailers include rates that can skyrocket if you are late on a single payment and clauses where you may still be responsible for interest accrued during the "no interest" period.
Lastly, for people who need additional assistance addressing their bad credit, an excellent resource for consumers are professional credit repair services. Professionals can lend their valuable expertise on important matters like disputing the questionable negative items on your credit report and specific steps you may be able to take to make the most of your credit.
