How to Better Your Credit Score

If you're looking for a loan or credit card and have bad or no credit, you've probably found it's more difficult than you expected--that you need to better your credit score to get the loan. Whatever your credit rating is now, here are a few tips to help you get a better credit score.

Instructions

1. Make a better credit score your goal. While you may not be able to control exactly how much your score goes up, you can control what you do to make it go up. Create a text file, entitled "My Credit Score," and record each step you take to better your credit score. For example, record each time you make a bill payment on time, and record each month you successfully keep your credit card under 30% of its credit line. So you know where you stand now, consider requesting your free credit report, and paying the small fee for your credit score.

2. Pay your bills on time. Because whether or not debts are paid on time make up 35% of your credit score, you can be certain that each on time payment will better your credit score. While automatic online payments are an option, they may turn out to harm your credit score if you don't have the funds available for the transaction. A better option may be to keep a log with your bills listed in one column, the date you are going to pay the bill in the second, the date the bill is actually due in the next, and the amount due in the last. Check this log every day, and you'll never have to worry about a late payment again.

3. Use no more than 30% of your credit line each month. For a better credit score, some people suggest using no more than 10% of your credit line.

4. Get a secured credit card. If you can't better your credit score because you don't have good credit and can't get any, then a secured credit card may be the solution. These are different from prepaid cards. Instead of essentially converting your cash into cash with benefits, you're basically loaning yourself your own money in order to build credit. The more money you use to secure your card, the higher your credit line is. Treat this secured credit card as if it were a regular credit card, and you'll build a better credit score fast.

5. Don't close a credit card account once it's paid off. Your credit score is partially based on your ratio of debt to credit. If you already have the credit, then you can better your credit score if you don't reduce this ratio by closing the account. If you must close the account to stop yourself from using your credit card, cut the card up and change the password to your account to something you will easily forget.

6. Open a new account. If you have little to no credit, you may need to open a few more accounts to prove you're credit-worthy. Get a credit card or bank loan, and make on-time payments on the credit card or loan, and you will certainly better your credit score.

7. Check back on your goals. Constantly revise and edit your goals to make sure they're achievable. Reward yourself for your successes. After six months or a year, check your credit report and score again to see how much you've improved your credit score.

Tips & Warnings

• You can request a free credit report once per year, and you have to pay a small fee to get your credit score.