10 things you can do to improve your credit score

If you currently have an above average or excellent credit score, it’s important to maintain it. If your credit score is already below average as a result of poor decisions and irresponsible financial actions in your past, it’s important to immediately begin rectifying the situation by taking steps to begin rebuilding your credit. This process can take months or even years of diligence and responsible financial planning. Here are ten strategies and tips for improving the information on your credit report, which will lead to a boost in your credit score. Unfortunately, successfully completing just one or two of these tasks probably won’t result in a fast and dramatic jump in your credit score. Pay your bills on time , late payments are the most common piece of negative information that appears on peoples’ credit reports and are often responsible for significant drops in credit scores. When it comes to loans and credit cards, it’s vital that you always make at least the minimum payments in a timely manner each and every month, with no exceptions. The easiest and most straightforward thing you can do to protect your credit report and credit score (or begin repairing it) is simply to pay your bills on time. Keep your credit card balances low.
The fact that you have credit cards impacts your credit score. Likewise, your payment history on those credit card accounts also impacts your score. Demonstrate (through your credit history) that you’re actively reducing your balances, while properly and responsibly utilizing your credit cards In some cases, you may save money by consolidating your credit card balances onto one low-interest card, as opposed to having that same balance spread over several higher interest bearing cards. Do the math to help you make the decision and take the action that’s best for you. Having a good history counts, so don’t close unused accounts. The longer your positive credit history  with each creditor, the better.
Knowing this, avoid closing older and unused accounts. Only apply for credit when it’s needed, then shop for the best rates on loans and credit cards. Only apply for new credit if you absolutely need it. Applying for a retail store card you’re going to use once or twice, when you could just as easily use an existing credit card, might not be the best idea. Applying for and obtaining multiple new credit cards (including store credit cards) within a several month period will be detrimental to your credit score. Unless you can save a significant amount of money on your purchase over time and can justify accepting a reduction in your credit score, don’t apply for credit you don’t actually need. One of the fastest and easiest ways to quickly give your credit score a boost is to carefully review all three of your credit reports and correct any erroneous or outdated information that’s listed. If you spot incorrect information, you can initiate a dispute and potentially have it corrected or removed within 10 to 30 days. Every time you apply for a credit card or any type of loan, a potential creditor will make an inquiry with one or more of the credit reporting agencies (Experian, Equifax or TransUnion). This inquiry information gets added to your credit report and will typically remain listed for two years. For one year, however, the inquiry will slightly reduce your credit score. If you have multiple inquiries in a short period of time, this can dramatically reduce your credit score. Bankruptcy does not offer an easy way out of their financial responsibilities or offer a quick fix. Instead, you’re setting yourself up for long-term financial difficulties, because obtaining any type of credit or loans in the future will be significantly more difficult. If you do file for bankruptcy, the best thing you can do is slowly rebuild your credit by paying all of your bills on time from that point forward, with no exceptions. Rebuilding your credit in this situation will mostly likely take years, with no quick fixes available.  An alternative is to pay off high-interest credit card balances using another type of debt consolidation loan or by refinancing your mortgage with a cash-out option. Instead of skipping a handful of payments or defaulting on a loan, contact the creditor as soon as a problem arises and negotiate some form of resolution that’s acceptable and within your financial means. Forcing a creditor to turn your debt over to a collection agency will simply cause you bigger problems in the future because many collection agencies are relentless when it comes to recovering money. Furthermore, the negative information that’s placed on your credit report will have a long-term negative impact on your credit score.

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