Improving Your Credit Score

If your actual credit rating is not as good as you’d like, you can take action today to improve your credit. Here are some of the things you can do to improve your credit rating:

• Pay your bills on time – Start catching up with all of your payments as soon as possible. Get current and stay current if you are late with some of them. The longer you pay your bills on time, the better your credit score will be.
• Ask your creditors for help – If you are having making payments on a timely manner, call your creditors to arrange a payment plan. It’s in your creditors’ best interest to help you pay them off.
• Keep balances low on credit cards – High outstanding debt can affect your credit and has a higher cost as interests are higher.
• Pay off debt as soon as possible – Pay down your revolving credit and keep it in as few accounts as possible. Having a lot of outstanding debt over many different cards reduces your credit.
• Don’t open new credit cards – Don’t open cards as a way to increase your available credit. Specially, don’t open a lot of them in a short term of time. New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.
• Search for a new loan in a 2 week period - FICO ® scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
• Re-establish your credit – If you’ve had problems in the past, open a few new accounts and make sure you pay them off on time.
• Have credit cards – Generally speaking, having credit cards and installment loans will raise your credit score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
• Check your credit score – Ask the reporting agencies to send you a free credit report and check for errors. National estimates show that errors occur in over 50% of the files.