Top 10 Ways to Improve Your Credit Score
Posted on October 19, 2012 by Michael Martin Leaño
Your credit score is quite important. It determines the amount you can borrow, the interest rate that will determine how much you’re going to pay back, and if your loan will be approved. And for this reason, it’s vital that you have a really good score or make it even better. Here are the 10 best ways to improve your credit score.
Tip #1: Never miss your payments
It’s basic but it works: always pay and on time. If you miss your payments, it will hurt your credit score. If you think you’re going to miss your payment date, contact your credit card provider and make an arrangement with them.
Tip #2: Demonstrate how stable your finances are
If you’re going to loan someone money, you’d like to be sure that they won’t just take the funds and scram. Same goes with any lender. To demonstrate how stable you are, show that you’ve lived at one address, worked at one company and banked at one institution for a substantial amount of time. Another tip: get a landline. This would show you’ll stay at your address for the long haul.
Tip #3: Keep a close eye on your joint accounts
Pay close attention to your joint accounts, whether they’re for savings, credit cards or whatever. This means the other person’s actions would affect both of you. If you want to end this financial connection, you need to close the joint account, which can only be done together. When it’s done, inform the credit agency to have the connection removed.
Tip #4: Get a credit card
This may sound contrary, but a great way to improve your score—especially if it’s low—is to get a credit card. Of course, you have to actually demonstrate your fiscal responsibility to boost your rating. This means you have to settle your entire balance monthly and never miss a payment.
Tip #5: Limit your credit applications
Whenever you apply for credit, the lender will do a "hard check" on your credit file. When this happens, the check will reflect on your history and actually lower your credit score by a few points. If you keep applying for credit, your score is going to take a considerable hit
Tip #6: Cancel cards not in use
Make sure you cancel unused credit cards or overdraft facilities. That’s because financial institutions examine your available credit when they’re thinking how much to lend you.
Tip #7: Check your credit report regularly
You can get your credit report from either Veda Advantage or Dun & Bradstreet. By doing this regularly, you can monitor your credit score and make any necessary adjustments if it drops. Checking your credit report regularly also lets you…
Tip #8: Search for errors
Look, even lenders make mistakes; they occasionally report the wrong credit information. To avoid this, study your credit report and look for errors. If you do find one, contact both credit bureaus to have it fixed. Remember: one measly error can affect all your subsequent credit applications.
Tip #9: Look at previous addresses
The actual history in your file may be correct, but there’s another type of error you might overlook: misspelled addresses. Correcting such errors may add previous unrecorded debts to your file, but this actually helps improve your credit score because it lets you show more instances of successfully settling debts.
Tip #10: Settle hidden debts, if you have any
Correcting misspelled addresses would also help avoid accumulating debts that you didn’t know existed. And since you don’t know they exist, they can really pile up and hurt your credit score. If all your contact information has been corrected, your file will show all these hidden debts and allow you to settle them.