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8 Tips to Follow for Credit Score Improvement

CREDIT 8 Tips to Follow for Credit Score Improvement

A solid credit score is a very important component of your overall financial health and well-being. Unfortunately, building your credit score takes years of consistently hard work. And, even more unfortunately, it can all come crashing down at the slightest mistake.

Though improving your credit score can be difficult, it doesn't mean that it is impossible. The methods discussed below will help you bump up your credit score, one little step at a time, starting today. Follow through with these tips and keep up on (or pay off) all your bills and loans and you're looking at improving your credit rating in no time.

Authorized User

Those with poor credit often find they have trouble getting a new credit card. Most providers simply do not want to give credit to those that have a history of misuse or abuse with them. Instead of tracking down your own card, it can be beneficial to ask a family member with a high credit rating to add you onto their account as an authorized user. This gives you the means to a credit card and will actually immediately boost your score as well. Your family member's good credit basically rubs off onto your score.

Credit Score Report Errors

Another surefire way to raise your credit score is by checking your credit report often. Over 75 percent of credit reports have been shown to contain at least one mistake. And 25 percent of these mistakes were so serious that they could lead to you being denied credit. If you catch a mistake on your report, you can clear the error up by contacting the major credit bureaus.

Rapid Rescoring

Rapid rescoring doesn't work for everyone but it can quickly improve the credit scores of those eligible for it. You are generally eligible if there is a known error on your report and you can prove that it is an error. Rapid rescoring is also almost only offered to those about to buy a new home. If you qualify, your score will be recalculated, minus the error, in less than 72 hours.

Automated Payments

One of the biggest credit card mistakes that people make are late payments One of the most important tools for your financial success is a credit card for your credit rating, but using yours incorrectly can have seriously negative consequences. Automate your bill payments online so that you never forget to make your monthly payments again.

Explain Yourself

Many people suffer from low credit scores for reasons irrelevant to the new loan or credit card they are attempting to get. Simply writing a short note explaining your circumstances can do a lot to ensure creditors that you are not as big of a risk as your credit rating indicates.

Make Two Payments a Month

Using a credit card to charge too many purchases each month can be harmful to your credit rating. If you find yourself nearly at your credit limit each month, it can be beneficial to make payments twice per month. In other words, you would be paying your monthly bill off in two installments. Surprisingly, keeping ahead of the game this way can actually bump your rating up a few notches.

Pay Down Cards

Your credit rating is affected by your total available debt-to-credit ratio and the available debt-to-credit ratio on each of your individual cards. If you have a credit card that is very close to its limit, it could be seriously damaging your overall score. Pay this card off before the others and you'll be in the clear.

Diversify

There are many types of credit out there and having only one could impact your score. For example, someone with only revolving credit could get a credit score boost from securing another type of loan such as a car loan. There is no reason to rush out and get a new loan just for the sake of it, but if you're in the market, it could definitelyw help your credit record.

A solid credit score or rating is incredibly important to your financial health. Responsibly using a credit card for your credit rating and taking into account the eight tips discussed above can greatly help you improve your score. While it takes a long time to actually boost your score, there is no reason why you shouldn't get started today.

 

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