There are a number of ways to increase and improve your credit score, and they’re not as difficult as you might imagine. A high, solid FICO score is vital these days; it has an effect on everything from getting approved for a credit card to getting approved for a rental application or a mortgage. If your score is low, it can negatively impact dozens of areas of your life, so it’s simply not worth it to let your score plummet. When looking to improve your score, you have to be vigilant and determined, but as long as you are willing to work on it, you can fix most of the things which damaged it in the first place.
Pay on TimeKeeping on top of your finances is crucial when you want to improve your credit score. You simply don’t have the luxury of a lot of late payments, whether the bill is for your credit card, your cell phone, or your cable provider. Every late payment is a black mark on your record, and it causes your score to drop. There are several ways to make sure you pay off your bills on time:
Set up a payment reminder;
Set up a monthly budget;
Use automatic payment methods
Reduce Your DebtThis option may be difficult but it can be done. Again, it will take hard work on your part. You can begin doing this by giving your credit cards a rest. You shouldn’t cancel them, because that’s generally more harmful than helpful. To get your finances updated and in order, just stop using them. You also need to be aware of your interest rates and the principle amounts you owe. By using the budget mentioned above, put the majority of your leftover funds toward paying off the cards that charge the most interest.
Be Aware of Your ScoreKnowing your actual credits scores needs to be a top priority as well. It will let you know exactly how much you need to improve. It will also let you see if there are any mistakes that can possibly be disputed. Often, someone’s score can lower dramatically due to something that isn’t even correct, which is why it pays to be both diligent and vigilant. Credit monitoring services are another way to keep good track of your credit score on a daily basis, and be alerted if any major changes occur.
Don’t Move Your DebtIn trying to get a handle on their finances, especially when it comes to credit card debt, many people make the mistake of “paying off” the balance of one credit card with another. Naturally, you really aren’t paying off anything; instead, you’re simply moving your existing debt from one place to another. It doesn’t really go anywhere, because then you are left paying off a larger balance on a different credit card.
Credit CareWhile other bills are important in determining your score, credit cards are highly important as well. In addition to the mistakes mentioned above, cardholders hold a variety of misconceptions about their credit cards, which lead to bad decisions that can actually negatively impact their credit scores even more. When it comes to credit cards, you should not :
Open several cards in a short amount of time;
Close down cards you do not use;
Open unnecessary cards in an attempt to better your score.
Your finances are too important to take lightly, and your credit score is too vital to let it plummet because of mismanagement and mistaken conceptions. Increasing your score is surprisingly easy once you know what to do. As long as you are responsible with your money, you can see improvement in a surprisingly short amount of time.
Diane Johnson graduated from the University of Utah with a degree in political science. When she’s not traveling she enjoys writing articles about University of Phoenix, reading books and shopping.