How to improve your credit score

Here's a short guide to illustrate how you can improve your credit score.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Income
• Credit card

1. The first step is to obtain a copy of your credit report. At the time of this writing, any individual can receive a free report from all three credit bureau at annualcreditreport.com.

2. Review your credit report and verify that all the information and history is accurate. If not you can dispute it by contacting the bureau, either by mail, or online.

3. To build and improve your credit score, you must always pay on time. It won't matter how much you pay as long as you meet the minimum balance due. This is important in building a credit history.

4. Pay attention to your debt-to-credit limit ratio. This ratio takes into account the total amount you owe against the maximum amount that the credit companies had set for you. It will raise a red flag if this ratio is high since its an indication that you are reaching your limit.

5. Keep a healthy credit history by keeping your credit card accounts that have the longest history. If you feel you need to close your accounts, start by closing the account that was opened most recently.

6. As a last step, it's good to have a good credit mix. This includes the right mix of installment loans, credit and retail cards.

Tips & Warnings

• When a party performs a credit check, this can hurt your credit score. If you are shopping for loans, its good to shop within a 2 week's period. They group all the activities (credit check) as one activity. Soft check does not affect your credit score.