How To Increase Your Credit Score
Some consumers pay little attention to their credit score until they're rejected for a credit card or loan. Credit scores determine whether you're able to acquire mortgage loans, auto loans and other types of financing. For this reason, it's important to keep tabs on your score and take steps to increase your low rating.
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Keep Accounts Active
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You may stop all credit card use to control debt. However, this move can result in credit card companies reporting your account as "inactive," and they're less likely to update your credit file. Instead of stopping all credit card use, learn how to control spending with credit cards. Periodically use your credit cards for inexpensive purchases and then pay off the balance in full each month. This keeps the account active yet wards off excessive debt.
Pay On Time
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Never send in a late payment or skip a payment because you don't have the funds. Financial problems may arise, but rather than ignore due dates, speak with your creditors to set up a new payment schedule. Creditors do offer provisions that allow consumers to skip a payment or send in payments past the due date without penalty. To take advantage of such provisions, you must receive prior permission from your creditors. Late or skipped payments without first communicating with your creditor will result in late fees and possible credit damage.
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Check Credit Reports
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Accuracy of credit report information also plays a significant role in credit scoring. Misinformation can include creditors reporting collection accounts, judgments, liens and late payments in error. Reviewing your history periodically is one of the best ways to quickly detect creditor errors. Annual Credit Report gives each consumer copies of all three reports once a year. Order your report online and begin checking the information for accuracy. Contact creditors about mistakes or dispute an item online.
Piggyback on Relative's Card
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Assistance from a parent, spouse or sibling can help increase your credit score fast. Choose someone with an excellent credit history (700+) and ask this person to add your name as an authorized user on one of their older accounts. Good payment history, low credit card balances and the length of credit history play a role in scoring. Becoming an authorized user results in this credit card appearing on your credit report. Adding years of positive credit information can quickly improve your low score.
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