There Are Simple Ways To Improve Your Credit Score. Here Are Five Of Them

If you’ve taken a hit on your credit score and you’re in the process of rebuilding credit, you may be frustrated. Improving your credit over time can seem like a daunting task. However, there are simple strategies that a person can use that will allow you to rebuild your credit sooner. All that is really required is the time and patience to do what is necessary. Here are five tips to help anyone improve their credit score.

1. Focus on Paying Down Revolving Accounts – While paying off mortgage, automobile, and student loans can improve your credit score, usually the results will not be as dramatic as compared to paying off your credit cards. Credit cards are viewed as revolving accounts. This means that the debt doesn’t have to be paid in full by the debtor at the end of each month. The problem is that if you are the type of person that makes only minimum payments and you never pay down your credit card debt, credit agencies rightfully view you as a more risky consumer to loan money. Typically, it is best to keep credit card balances below 30% of your limit.

2. Don’t Use Credit Cards Frequently – Making frequent and large charges to your credit card can have an impact on your credit score. It doesn’t matter if the balance is paid in full at the end of the month because balances on your last statement are reported to credit agencies. The problem with this is that it means your may fall over the 30% credit card utilization limit even if you’re paying off the debt every month.

3. Use Your Older Credit Cards When Needed – Older accounts are viewed better than newer accounts. Unfortunately, if you don’t use the older credit cards then they’re not given equal weight when calculating your credit score. Therefore, it is recommended that you use older cards every so often (3-4 times per year) to keep this problem from occurring.

4. Always Get a Copy of Your Free Credit Report – You are provided a free credit report once a year. There is no reason why you shouldn’t take advantage of this to check on your accounts and balances and to double check that everything is correct. You can get your credit report from AnnualCreditReport.com.

5. Understand The Basic Formula For Calculating Credit Score: Credit scores are determined by several different factors. It is important to understand the basic formula. While much of the information is hidden from consumers, there are some things that are apparent. (1) If several inquiries are made to your credit report, it will drop your score. Generally, an inquiry for a new credit card account can cost you 5 points off your score. (2) Requesting your personal credit report will not negatively affect your score. Therefore, there is no reason not to check on your credit report occasionally. (3) Pay your bill on time each and every month. This is, of course, easier said than done. But if you can do it, it is the most basic approach to ensuring your credit score will remain high.

Following these simple tips will help you greatly improve your credit score.   Persistence and a dedication to change your life is the only other requirements.  Good luck.

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