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Steps to Improve Your Credit Score

April 4th, 2009

250x250 - What’s Your Credit Score?Today we have yet another credit-related article (if you’re getting tired of this topic, don’t worry; it’s very rare for this site to stay within a single niche for more than a few days) by an author named Penny Harmon. It contains some good general information about why your credit rating is important, how to find out about your current status, and as the title suggests, how to improve your credit score.


With the economy struggling, more and more people should be concerned about their credit score. Your personal credit score is used by insurance centers and loan companies to evaluate your credibility. It will also determine what interest rates you are offered when applying for a loan and what price you will be given on insurance. The following information will help you to improve your credit.

The first thing you’ll want to do to improve your credit score is evaluate where you are now. There are three major credit report bureaus: Experian, TransUnion, and Equifax. Generally, most lenders do not report your information to all three, so you’ll want to make certain to get a copy of your credit report from each one.

When you get your credit reports, the first thing you’ll want to do is make certain that all of the information received is correct. Unfortunately, errors do occur and even the smallest of errors can hurt you in a big way. If you do find something that is incorrect, contact the company listed on the credit report to have the information removed.

After you’ve looked over the credit reports, you’ll want to sit down with all of your bills. In order to improve your credit score, you’ll need to make sure all your bills are paid on time. If the due date states February 15th, you’ll need to make sure the payment is sent in by February 10th. This will ensure that it gets to the company on time. While most companies do not report to the credit reporting bureaus until a payment is thirty days late, you’ll want to make sure there is no chance of this happening.

If you currently do not have a credit card, now is the time to obtain one. Using a credit card and paying the monthly payments on time will help to improve your credit score. However, do not pay off the balance each month. Loan centers will want to know that you are able to make your monthly payments on time and when they see your credit history of monthly payments made on time, they will be more apt to approve you for a loan and give you a lower interest rate.

Another way to improve your credit score is to stop applying for credit. Each and every time you apply for credit, it is recorded on your credit report. An insurance company or mortgage lender may feel you are taking on too much debt if they see too many inquiries on your report. Also, if there are too many inquiries on your report, you may see your score move lower by a few points.

To improve your credit score, you are going to have to start paying off any old debt listed on your credit report. While the old debt may diminish in importance over time, it still must be paid off to fully improve and repair your credit score. Even if you start paying twenty dollars a month, you will eventually get the old debt paid.

While it may seem to take a long time to improve your credit score, know that it will be worth it in the end. Once your credit score has improved, you’ll find yourself receiving offers with much lower rates.



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