Increasing Your Credit Score and Rebuilding Your Credit

[Apr 18, 2008.]

 

If you know that your credit score is low, you know that some financial transactions are going to be more difficult. You might find that you are turned down for some loans or that you’re getting higher than average interest rates for the loans you are approved for.

In order to start rebuilding your credit, you need to learn about specific things that will influence your credit report and increase your score.

• Pay down your credit cards - On your credit report, it's more damaging to carry high balances on these kinds of accounts. But even if you can't pay them down immediately, making sure that you're never carrying more than 50% of the maximum limit can help to raise your score. This shows that you're not trying to live above your means.


• Make your payments on time - Even one late payment can begin to hurt your credit score. Make sure that your payments are always on time and sign up for a bill paying service if that will make things easier. These kinds of services will take the money directly out of your account when it is due, so you don't have to remember to send in the bill.


• Make sure no one else has access to your account - Fraud is one of the leading causes of damaged credit in the U.S. (after overspending). Take the time to read over your credit card statements each month and call about any purchases that you do not recognize.


• Do not close old credit card accounts - While you may have heard that more credit card accounts will cause your score to be lower, this doesn’t mean that you want to close the old accounts that you’re not using anymore. In fact, this can do more damage. Simply try not to open any new accounts in order to stop further credit score damage.


• Don't apply for bankruptcy unless absolutely necessary - This is the single most damaging action you can take for your credit score. And in these times, filing bankruptcy does not mean that you will wipe your debt clean either, only that you will have a lower debt amount to pay. Filing bankruptcy stays on your credit report for ten years and it will significantly lower your score and keep it low until it is off your report.

There are many other steps that you can take to help increase your credit score, but this is a good set that you can keep in mind as you’re making plans toward credit repair.

More Information:

• Steps You Can Take Today to Start Rebuilding Your Credit
  While it can seem impossible to dig yourself out of financial trouble, the truth is that you didn't get here overnight. Your debt accumulated over years and years, most likely, so while the road to debt freedom may be long, it's not a road that will go on forever.


• How a Credit Counseling Center Can Help You
  The old thinking in credit rebuilding was that you should avoid credit counseling at all costs - and some people will still tell you that. It used to be that going to these kinds of companies would cause your credit rating to drop as you were admitting financial troubles.


• Rebuilding Your Credit On Your Own vs. Getting Help
  If you're struggling to pay off debts and boost your credit score, you're not alone. More Americans than ever are dealing with financial troubles that are not only causing their financial health to suffer, but also their emotional health.


• Preventing Credit Damage
  While a lot of people focus on dealing with credit issues once they've become significant, the truth is that it's a lot easier to handle financial troubles before they even begin.


• Living Cheaply When You're Rebuilding Your Credit
  The fact of the matter is that when you’re trying to rebuild your credit, you're going to need to make some changes in your life. This will mean that you need to adjust your current spending habits in order to start paying down the debts that you have, as well as start looking for ways to live within your means for the rest of your life.