The credit crunch and downturn in the economy has most of us concerned with our
credit scores. It is more important than ever to do what is in your power to
increase your credit score. A higher score can give you the leverage you need
to achieve your financial goals. Here are ways you can increase your credit
score:
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Review your credit report on a regular basis to make sure the information is
accurate. Incorrect information could hurt your score, such as accounts that do
not belong to you. Credit reports are maintained by three credit bureaus:
Equifax, Experian, and TransUnion. You are entitled to one free credit report
every year from all three bureaus.
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Credit scores are based on how you’ve used credit in the past and demonstrate
how you’ll use credit in the future. Therefore, if you don’t use any type of
credit, your score will not improve and could even become non-existent.
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Distribute small charges among several cards, and make payments on time.
Setting up automatic payment each month is a fail-safe way to pay bills on time
and improve your score. Also, try to make payments before your monthly
statement’s closing date. The balance reported to the credit bureaus is usually
the one on your last statement of the month, and a lower balance helps your
score.
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Aim to use 30% or less of your available credit. Your credit score is impacted
by how much credit you use in relation to how much credit is available. To help
your credit score, strike a balance between your credit limit and how much
credit you use. The less of your available credit you use, the better.
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Keep your accounts open. Old credit card accounts, even inactive ones, lengthen
your credit history and contribute to improving your score.
Every extra point added to your credit score is meaningful, especially in this
economy. Just stick to the basics, and you will see your credit rank improve as
well as your financial independence!
