Tips on how to Raise your Credit Score

Today’s buy now and pay later philosophy can have detrimental effects on your credit score rating. With this in mind, there are some steps that you can take to improve your credit score. A credit score is figured out based on several different criteria, so there is more than one area to direct your focus.

Improving your credit score can take time, so the sooner that you begin repairing a damaged credit score, the better off you will be from a financial perspective.

When you have a lot of credit card debt, and too many loans, you become seen as a risky proposition for a lending institution. Your credit score rating gives them an indication of how likely they are to be repaid on their investment, which is why it is crucial for you to have a healthy credit score rating.

Some of the steps to improving your credit score are common sense, and some you may not be aware of as having consequences. Begin by paying your bills in a timely fashion.

Bill payments need to be made on time, and preferably in full. The more money you leave owing, per month, the more debt you will quicly accrue, leading you down the path towards a low credit score rating. To help you improve your credit score in this aspect, you should set up your bill payments electronically, which will help you to ensure that your bills are paid on time.

After you have paid off a credit card, it is of the utmost importance that you do not use that card, but keep the account open. If you close an account, it will actually work against your credit score rating. The credit bureau uses credit history as a deciding factor for your score, so the longevity of an established credit history is imperative. You may feel free to cut up the card, or lock it away, but do not use it. This card will help your credit score.

If you are not in a position to pay off all of your debts, make sure that you are not close to maxing out any credit cards, as this has negative repercussions on your credit score. A major factor in tallying up a credit score rating is the debt to income ratio, which means that you should not be anywhere near approaching your available credit limit.

If you have a card that you are in good standing with, see if they will bump up your available credit limit, as this will bring your overall credit score up to an improved number. This utilization ratio should be kept stable, and below 30%. This is figured out by dividing your amount owing by the available credit.

When you are trying to improve your credit score rating, you may wish to be careful with balance transfer credit cards and debt consolidation loans, as they can be used against your credit score. Applying for additional credit can make you seem desperate in the eyes of FICO, so you may wish to be more cerebral in your payment practices.

To quickly improve your credit score, you should take on another job, or figure out how to better budget your money and put some more down towards the principal amount owing on all of your existing debts. The more money that you direct towards the principal, the quicker your debts can be paid off, which will help your credit score rating to rise much quicker.

As you take the steps to improve your credit score, make certain to keep an active eye on your spending patterns, and perhaps learn to stick to a budget and avoid impulsive purchases. Credit cards are fantastic for emergency purposes, but they can harm your credit score, which may leave you in hot water down the road when you are only able to secure high interest loans for the things you really need, such as a car or house.

Spend wisely, and live within your means.