Tips For Boosting Your Credit Score

In this economy, many seek to improve their financial well-being. One effective measurement of the health of your prosperity is your credit score. When seeking to improve your score, you must keep in mind that there is no “quick fix” for a problematic credit history. However, there are several things you can do to ensure that your score is headed in the right direction.

• Keep track of your credit score. Credit scores run from 300 to 850. Your personal score is based on the information that the three big credit bureaus (Equifax, TransUnion and Experian) have on file for you. Be sure to check your credit report on a regular basis as mistakes can be made that can adversely impact your financial health. http://www.AnnualCreditReport.com is a government-run website which
allows you to access your credit report annually at no cost.
• Be smart with installment plans. Your credit score is based on how much unused credit you have compared to how much you currently owe. If you are often late or very close to your maximum credit line on your account(s) this will impact your credit score in a negative way. One way to take care of this problem is to take out an installment loan to pay off your credit cards. Get a second mortgage or line of credit and take care of these cards quickly. Note: If you are committed to your financial health this is not generally considered a desirable move. However, improving your credit score and making good long-term financial decisions do not always go hand in hand.
• When in doubt, pay off the cards closest to their maximum balance. The intention with this technique is to free up as much credit as possible. A general rule of thumb is that you want to owe 30% or less than your available credit.
• Using old cards is a good credit-building practice. Paying off an older credit card and never using it again can actually harm your credit score. Regularly charge a small balance and pay it off quickly. The key here is to resist charging more than you can pay off at the end of the month.
• Don’t close accounts. Closing a card once you pay it off can actually lower your credit score. As stated above, it is better to shake the dust off that old card and charge a small amount on it, then pay it off before it collects interest.
• Increase your credit limit. Remember the rule of thumb: having a large amount of available credit does wonders for your score. The key here is to have as much difference as possible between the amount of credit available and the amount you owe.
• Take advantage of automatic payments. Often, late or missed payments are the product of a memory lapse.
• Beware late payment penalties. Even a late fee from your local library can impact your credit score.
• Don’t get sent to collections. It is more beneficial to you to pay that extra $30 fee you don’t agree with than to have your score damaged as a result of stubbornness.