How to Make My Credit Score High
Your credit score represents your reputation in the financial world. A high credit score will help you qualify for an auto loan or a mortgage. It will even help you get better interest rates on your credit cards and secured loans. If you don't like your present credit score, you can increase it by watchful oversight of your credit reports and by prudent financial management.
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Instructions
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Look up your credit reports and check for mistakes. Jean Chatzky, author of "Pay It Down," says that mistakes appear in more than two-thirds of credit reports. Find the mistakes so you can have them fixed. Don't worry about a slight misspelling of an employer's name. Focus on significant issues such as false records of late payments or paid-off bills listed as overdue.
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Inform the credit bureau of mistakes in writing. According to Chatzky, you can now do this by email as well as by post. Give the credit bureau the correct information, and ask them to correct the errors. If they dispute your statements, request that they include your information in their report until the problem is resolved.
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Pay off any overdue bills immediately and begin paying all your bills on time. Since your credit score reflects your likelihood of timely payment, consider this the central pillar of your new, higher credit score. Discipline yourself to stop overspending.
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Pay attention to your percentage of debt to income. Finance author Jane Bryant Quinn says that your total repayment obligations should be less than 40 percent of your gross income each month. Include your home mortgage in this 40 percent.
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Keep your credit use below 20 or 30 percent of credit available. However, higher balances on some premium charge cards such as American Express may not affect your ratios according to "Smart Money" magazine. When you examine your credit reports, make note of which accounts appear and which do not.
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Don't apply for several credit cards in a short period of time. This could give the impression that you have financial difficulties. However, according to "Smart Money," you should apply for additional cards over a longer period if you need to improve your use-to-available credit ratio. As credit card companies are reducing lines of credit, this is becoming a useful strategy.
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Practice sound financial management. Don't charge things you cannot afford. Become current with your debts, and start paying off your credit card balances every month. Once you reach the place where you are using credit for convenience rather than survival, you will have a higher credit score.
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