How to Improve your Credit Score
Your credit score is a little number that has a significant amount of influence when it comes to matters of personal finance. It’s what will determine if you get approved for a credit card or not, if you qualify for a line of credit, or if you can get a mortgage and at what rate.
Here are a few tips on how you can improve your credit score and keep it on the high side:
Tip #1: Know Your Number
First things first, you need to know what your credit score is and if it’s not pretty, what’s causing the problem. A credit report will tell you your credit history and current credit outstanding.
Tip #2: Pay Early
Always pay the balance or the interest owing on your debts a few days before it is due. That way, if the due date falls on a Sunday or holiday, you don’t have to worry about the payment clearing late and this appearing on your credit report.
Tip #3: Don’t Max Out Your Debt
A good rule of thumb is to keep your debt levels below 50% of your available credit. If you’re over this ratio, pay some off or consider taking out another credit card. And make sure you never go over your credit limit – the Credit Gods really don’t like that!
Tip #4: Avoid an Influx in Credit Requests
Avoid applying for credit unless you have a genuine need for a new account. If you end up applying for a few different credit cards in a short period of time (the sign-up discounts offered on store cards can be enticing), or if you’re searching for a mortgage and trying to get pre-approved by a few different lenders, the credit bureaus will likely start to think that you’re in financial trouble and your number will drop.
Tip #5: Check your Number Annually
You should check your credit score once a year to make sure there are no mistakes on your file or that you haven’t been a victim of credit fraud. The Credit Gods are not perfect, so if a mistake happens it’s your responsibility to fix it.
Tip #6: Give it Some Time
If you have poor credit, just remember that as time goes on (if you pay your bills on time and use a wise amount of debt), your score will eventually improve. It just might take a few years.
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