In today’s economy it’s more crucial than ever to have a good credit score, but millions of consumers simply don’t and all too often find themselves asking how can I improve my credit score?
The question is, “How can I improve my credit score with my existing credit record?” Having credit accounts would automatically mean that the bureaus will have your credit file. Below are the essential tips to help you answer your question, “how can I improve my credit score?”
• Be smart in acquiring and using credit. Think twice before you purchase something and make sure that you pay your monthly balance on time. If you want to do away with interest charges then a $0 balance is a good idea, but it won’t enhance your credit score. A $0 balance isn’t bad though but it will give the bureau the impression that you are not actively using your credit account. A $5 - $10 remaining on your monthly balance is healthy enough to improve credit score. This remaining balance will not hurt your score in fact it will raise it into several notches. Even if you have all the means to pay your balances at the end of the period, never use your card to its limit. Leaving a balance that is less than 30% of the available limit is healthy enough for your credit score. Can it really improve my credit score? Okay, get it down to 10% and you will reap the greatest rewards to your score. You have to take extra care on this step since ? of your score is based on your credit utilization ratio.
• Spread out your debt. Pertaining to credit scoring, it's better to have small balances on several cards than a big balance on one card. It is also better for your credit card to have a wide gap on the balance and limit. You might be wondering, “What is the purpose of this and how will it improve my credit score?” Paying installment debt can still add points to your credit score but paying down revolving debt improves your score faster. This is one of the most effective ways to improve your credit score.
• Maintain your accounts open and active. If you want to improve your credit score then keep your accounts active. You might be wondering how this step will improve your score. Your credit account has a history which is also plays an important role in improving your credit score. And don’t let your creditor close it due to inactivity (a ‘closed by grantor’ listing lowers your credit score).
• Improve credit score with a healthy mix of credit. How does this improve your score? Well, let me explain. Have at least one installment and two revolving accounts; after that be careful about applying for new credit. Too much available credit can be perceived as dangerous by potential lenders. You’ll also get dinged with inquiries; every point counts when you are applying for a major loan.
• Monitor your credit reports. I personally do this one whether I am trying to improve my credit score or not. It's just a good idea to do. Credit report isn’t accurate all the time. If there are mistakes, you need to notify the bureaus to correct them. If you are going to be judged so strictly by what’s on your credit report, then it should be accurate.
The hardest feeling one can get is when you lose with credit score battle without giving a fight. If you already decided on giving a fair fight to good credit score, visit legacy legal.