Improve Your Credit in 5 Steps

Your credit score is a very important number in regards to your ability to secure a loan for an automobile, house or a new home business. Your credit history grows over time as well as your credit score, usually a number between 500 and 800. Here are a Five Steps to Improving your Credit Score: 

Correct Mistakes in your Credit Score:┬áIf you credit report show wrong information then it could be affecting your credit score. Review your reports from all three credit bureaus for accuracy once a year. You can go online to get your credit report using such services as Equifax.com. They even offer a 3-in-1 report that shows your credit report for the other two credit bureaus. Make sure that the report you pay for includes your credit score too. You will┬áreview your credit report from each credit bureau and submit any changes you find to correct the information. Each credit bureau has a “Disputes” toll free number you can call you start the process.

Pay your bills on time:This is easier said than done but it’s especially important that you make prompt payments for months, and years to show that you can pay bills on time, and deserve credit from banks in the future. Another reason to always make your payments on time is that more recent late payments affect your credit score more than older late payments.

Lower your credit card balances:The balance of each of your credit cards may affect your credit rating. Keep the balances lower than 25% of the available balance of each credit card.

Pay off debt rather than moving it around:Since the ratio of your credit card balance to your credit limit is key, closing out an account and transferring the balance simply means you increase that ratio, which is likely to lower your score.

Don’t close unused credit card accounts near loan time:If you have several credit card accounts but are only using a few of them, you’ll only raise your balance-to-limit ratio if you close the unused ones.

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