Four Simple Ways to Raise Your Credit Score
Photo: © Edward Bock - iStockphoto
Raising your credit score can improve your life in many ways. You'll have access to cheaper mortgage rates, you'll pay less for insurance, and you may even have a better shot at your dream job. Here's how to proceed:
1. Know what's going on.
Annual credit report.com allows you a free report from all three credit bureaus once a year. (Avoid other "free credit report" sites, which are really attempts to sell you something.) You're also entitled to a free report if you're turned down for credit. Dispute any misinformation that negatively impacts your score. Creditors have 30 days to verify their report or they must remove the negative information.
2. Pay your bills on time.
It may seem obvious, but it's amazing how much one late payment can hurt you. To help avoid this, have your monthly bills withdrawn from your checking account automatically. If you're ever unable to pay, don't just ignore the bill. Call the creditor and try to work something out. Sometimes creditors forgo a negative report if you make a good faith effort to pay what you can.
3. Pay down your card balances.
Credit scores are based on how much credit you use in comparison to how much is available. The smaller your balance, the better you'll look, but don't avoid using credit altogether. You can't have a good credit score without using some credit.
4. Avoid closing unused accounts.
Unused accounts help by showing successful payment history. Closing them means you have less credit available, which hurts your score.
Improving your credit score is often easier than you think, and most situations are far from hopeless. With a little effort, you can enjoy all the benefits of a better score.
