Improving Your Credit Score – A How-To Guide
Getting the perfect credit score has been quite a challenge for a good number of people. However, such a score will guarantee you a lot of things. This means that you need to go out of your way and work on raising your credit score if it has been down. Luckily, there are ways to achieve this quickly, and this guide will look at how to improve your credit score.
Be Timely with Your Bills
Your payment history accounts for about 35% of your credit score. Looking at these values, you really need to ensure that your bills are paid on time to avoid losing valuable points. If you have been sitting on those bills, then it is time to get up and settle all of them. It is also pertinent to understand that accounts that have been late for more than 90 days attract the highest negative score. Therefore, start with those payments that are long overdue then hasten to complete even the most recent ones and remember to pay them in full.
Commit Yourself with a Credit Card
Having an active credit card or two is also one sure way of improving your credit score. If you qualify as a responsible card holder, there is no way your credit score will be down. Being responsible means making your payments on time. In case you do not qualify for a traditional credit card, you could try a secured one. As much as this card requires you to make a deposit first, it is still helpful in healing your credit score.
Avoid Opening Many New Accounts
Each time you go for a new credit card, the company always carries out a hard check on your credit health. Opening many accounts means that more checks will have to be carried out. If there are too many checks carried out on you, your credit score will definitely suffer when applying for the cards. This is because these checks are associated with people who are desperately trying to get credit and it is best to minimize them.
Limit Your Utilization Rate
Although it is advisable to get a credit card to improve your credit score, do not max out this card. Close to 30% of your credit score is based on your credit utilization and the lower this value is, the better your score. It is easy to calculate your usage. Simply divide your credit balances with your credit limit and anything between 0-20% is fine. Otherwise, limit those expenses that you make on your credit cards or you could also talk to your provider to increase your limit.
Do Not Close Old Accounts
If you have been thinking of closing your old credit accounts to create more room in your wallet for the new ones, then think again. Something close to 15% of your credit rating is based on your credit history. This implies that if you have old credit accounts, your chances of easily getting a better score are quite high. By closing your old accounts, you are limiting your history to the age of your oldest credit card which will lower your score.
Negotiate Where Possible
As much as you may have wanted to do everything right, there are times when you may not be able to meet one or two payments. This falling back on payments can ruin your score but you can negotiate your way out before it does. In case you lost your job somewhere along the line, make your creditors aware of this and ask them to recall any collection notice they may have put on your account. You can also ask for a good-will adjustment from some of your creditors. In fact, many people do not do this but you will be amazed at how understanding they can be.
Living without credit is not a possibility in today’s living conditions. No matter how bad your credit score might be, you always have a chance of reviving it and getting to enjoy even more credit. These simple tips will help you breathe a new lease of life to your credit score that will finally bring it up.
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