How to Improve Your Credit Score

In countries that run primarily on credit like the U.S. credit scores are extremely important and it is next to impossible to buy anything with a bad credit score; even if you do manage to get a loan, or buy a car or house, you will undoubtedly pay higher interest rates and mortgage amounts with a poor credit score. Bad credit scores are caused by making late payments, defaulting on payments, foreclosures, etc. but there are times when a person has a bad score because the system is not updated with debts that have been paid or a mistake has been made, so if you find yourself with a low credit score for any of these reasons, here are some tips to get it sorted out.

PREVENTION IS BETTER THAN CURE


A good credit score is 601 or higher; 600 or below is a bad credit score and will mean problems. The best way to maintain a good credit score is to make all credit payments on time, and maintain low credit card balances; in this way you will keep your credit score from going down in the first place. Keep tabs on your credit score by checking it often and making sure it stays high; remember that mistakes can be made and give you a bad credit score and the earlier you find these errors the quicker they can be fixed, so check your credit scores often.

TAKE CHARGE OF YOUR CREDIT CARD


Your credit card is one of the major factors when it comes to improving your credit score; incurring more debt when you have a low score will only make your score worse and get you deeper in debt so cut down on your credit card use as much as possible and stop using it altogether if you can. Make your credit card payments regularly, starting with the cards that are closest to being maxed out, rather than the cards with the highest interest rates.

WORK OUT A PAYMENT PLAN


If you are having trouble making loan payments, talk to your lending agency about it and see how best you can work with them to pay off your debts; lending agencies will often offer you different terms so you can keep up with your payments rather than trying to make payments you cannot afford, falling behind and ruining your credit score. This wont improve your credit score immediately as you will still have to pay off the loan but it will at least keep your score from going even lower.

CREDIT APPLICATIONS


Avoid making credit card applications to get more credit while you are trying to improve your credit score; your application will most likely be denied anyway but the fact that you make the application will hurt your credit score even more if you already have a borderline score, so work on clearing up your current debt without trying to get more credit. Also dont try to close delinquent accounts as a way of getting rid of them and improving your credit score as this might actually backfire and make your credit score even worse.

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