Easy Ways to Improve Your Credit Score
Most people don’t think about their credit score until they are looking to purchase a home or have applied for credit and are not happy with the interest rate they are quoted. Don’t let this be you. While it may seem trivial, checking your credit report regularly is very important. This is not just to check for possible identity theft, but to make sure the information is accurate. It is very common to have closed accounts show as open, which in turn increases your revolving credit and can lower your score. If you have bad credit, there are a few things you can easily do to improve your credit score.
1. Get Your Balances to Less Than 50% of The Limit
One of the easiest things you can do if you have bad credit is to concentrate and pay down any balance that is more than 50% of your credit limit. This is easy to do on low limit cards – you have a $1000 limit and you have used $900 of it. Since you have no issues paying the monthly bill, it is really not thought about. The credit rating agencies look at the fact you are using 90% of your available credit and knock your score down. It does not really matter if you pay on time or not (but of course this helps!). Fix this for all revolving accounts and you will see an immediate boost in your score and be on your way to improve credit. If you cannot pay them down, consider consolidating to cards with much higher limits and removing the low limit cards.
2. Remove Late Payment Flags
Another thing that you can do to improve your credit is to find all the late payment flags on your account and write a letter to the creditor asking them to remove it. If you really were not late, then dispute it. These flags can be quite damaging and have the same effect as if you filed for bankruptcy on your credit. In general, if you had a late payment but now are caught up and up to date, the creditor will agree to remove it from your file. This will improve credit scores immediately.
3. Do Your Homework For The Best Rate
If you have already started monitoring your credit & to improving your credit score, the next step is to make sure you shop around for the best rates. Websites such as lendingtree.com, bankrate.com and mortgageloan.com are invaluable to easily get multiple rate quotes from competing lenders. Just be sure to use large, reputable, well-known sites to avoid credit report scams. These are often the best starting point to get some numbers going before you speak with a local bank or credit union about a loan. Knowing the range of rates offered online give you leverage in negotiations with local lenders.
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