The Top 10 Ways to Improve Your Credit Score
The ripples of a pebble on the water’s surface are evidence of its actions. The ruptured area radiates with
proof of the rock’s exploits. Credit works in a similar manner. It radiates as proof of your financial actions entered into for all to see. It leaves a tide of effects on the surface of your financial future that can either help or hinder the home buying process. If your ripples mark the struggle to maintain a positive credit score, there are 10 ways to smooth out your credit in a relatively short amount of time.
1. Know your score
Check your credit reports from all three credit reporting agencies and make sure there are no inaccuracies or out-dated information listed. Ensure that all closed accounts are listed as such and the credit limit on your cards is reported correctly. Higher spending limits mean a higher rating for you.
2. Pay your bills on time
As obvious as this seems, late payments are the most common piece of negative information on a credit report. Make sure to pay at least the minimum payment each month to your mortgage, car loan or credit card account. Many card companies even offer automatic email reminders.
3. Keep credit card balances down
Though a high spending limit looks good on your credit profile, actually using more than 35% of it does not. Regardless of how high you can go and how devoutly you pay, try to keep those balances low.
4. Don’t close unused accounts
Credit history counts considerably towards your score and healthy, long-standing accounts are important. If you have credit cards you don’t use, put them out of reach and reap the benefits of a long-term relationship.
However, it is a good idea to use those cards every six months for a small purchase ($5 is plenty), because the credit card granter will often close your account if you have lengthy periods of inactivity. Mark a “Use all my credit cards to buy a candy bar” day on your calendar, and then be sure to pay the balance off right away. This will keep your accounts current and raise your credit score.
5. Only apply for needed credit
Resist the temptation of the 20% discount offer if you open a department store credit card. Unless it’s a big-ticket item that you’ll be paying over time, using existing cards for your purchases is a better idea. Remember that every time you apply for credit of any kind, an inquiry goes to one of the credit-reporting agencies and can stay on your report for as long as two years. Multiple inquiries in a short period can seriously reduce your score.
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