How To Improve Your Credit Score

Posted by: Sally S. | Dec 13,2007

We’re always looking for ways to improve our credit score. Your credit score affects everything from your ability to get a credit card to the interest rate you’ll pay for a home or a new car. Even insurance companies use credit scoring to determine your eligibility for insurance. Your credit score is based on your outstanding debt, your payment history for loans, credit cards and other accounts reported to the credit bureaus, credit report inquiries, the length of your credit history and the types of credit on your credit report. Some things you can do to improve your credit score:

 

Always pay your bills on time to improve your credit score. Your credit cards and loans may allow you to skip a payment, especially at this time of year. Don’t do it! Keep paying on your debts and pay more than the minimum amount due each month to improve your credit score. Try to keep your credit card balances low, so the amount of debt is in line with the amount of credit you have available.

 

If you have any delinquent accounts, bring the accounts up to speed right away. Contact your creditors before your debts become a problem to see if you can work out a payment agreement to prevent black marks on your credit report.

 

A few years ago, I would have told you to clean up your credit history by cancelling paid off accounts. But now, I’ll agree with other industry experts and say leave them open; showing your positive payment history can only benefit you and help improve your credit score.

 

Don’t open credit cards that you don’t need; instead, work on expanding the types of credit you have. Your credit history improves with a combination of credit types including installment accounts and revolving lines of credit.

 

Read what others are saying about credit scores in the Credit Forum.         

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