Need to improve your credit score? Here’s how
Never underestimate a good credit score. Having a good credit score means the savings of hundreds or even thousands of dollars on loans. Having a good credit score means getting the most bang for your buck.
But what happens if your credit score hits rock bottom? It means, simply, that you need to take some steps to get it back up where credit card, mortgage, and loan companies want you for a customer and you can do that by following these easy tips.
Tip #1 – Pay bills on time
Nothing lowers your credit card score faster than missing payments. The two most common reasons for missing payments are either you don’t have the money, or you have trouble keeping your payments organized.
If you don’t have the money, take the time to look at your spending habits. Get brutal. Decide where you can cut costs so you have money to make your payments. As painful as this sounds, it’s much better than the alternative of contacting your credit card, mortgage or loan company and asking for lower payments.
Begin using a calendar, either digital or the old-fashioned kind, and scheduling your payments. Set up reminders so you don’t miss your payments.
The longer you make your payments on time, the higher your credit score climbs.
Tip #2 – Don’t switch credit cards
Many times, when people have trouble making payments, they listen to the ‘experts’ telling them to consolidate payments with a lower interest rate. In reality, you lose points for switching cards. And you end up with a good credit score if you keep your credit cards and pay down the balances.
Tip #3 – Keep balances low
Never max your credit cards out. Credit reporting agencies take into consideration how much you owe when figuring your FICO scores. Regardless of how much each card allows, set a limit for yourself and make yourself stick to it. Watch your required payment each month and stop using the card before that payment gets uncomfortable or difficult to make. The name of the game is self-control.
Tip #4 – Check your credit scores regularly
Sometimes a bad credit score isn’t your fault. This is why it’s important that you check your report at least once each year. Check for false reports, mistakes and even identity theft. If you find mistakes, contact the reporting agency right away.
Recently, Congress made it easier for you to get your credit scores by setting up the website Annual Credit Report. Get your FICO scores easily from all three credit reporting agencies by visiting this site.
Also, stay informed by regularly checking an informative credit card website. Where you can read up on the latest and most important news affecting you and your credit.
Bad credit scores raise your interest rates, increase required utility deposits, and reduce your chances of credit approvals. If you have bad credit, don’t worry. It takes time, but it’s not impossible to get back to a good score.