How To Improve My Credit Score: Five Steps To Take

That three digit number developed by those guys at FICO can determine many things in your life, from whether or not you can get a loan or a credit card to whether or not you can get hired at some jobs.

Credit Scores are calculated based on the information on your credit report and every time your credit report changes, so does your credit score. Even small changes can have a major impact. With that in mind, here are a few things you can do to Improve Your Credit Score.

1: Keep an eye on your credit report and if you spot any errors, have them corrected. One study found that as many as a full quarter of all Credit Reports contained some errors that could have a negative impact on credit scoring.

In addition to making sure that all the information on your credit report is accurate, you should also make sure that it is up-to-date. Negative information that is over seven years old must be removed. The exception to this is information about a bankruptcy, which can remain for ten years.

2: Maintain your oldest credit accounts regardless of whether you are using them or not. One of the things that influences your score is the age of your accounts. Having a long positive history with a creditor will increase your score dramatically.

3: Keep the balances on your credit cards to no greater than  twenty-five percent of their credit limits. If you have a few credit cards with low credit limits that are at near maximum usage, consider transferring those balances to a credit card with a higher limit.

4: Make sure you pay all of your bills on time. Payment history is the most important factor in calculating your credit score, so the best way to get and keep a high credit score is to always pay your bills on time, and as agreed.

Of course, paying your bills on time and as agreed is not always possible. Hard times can befall the best of us, making it impossible to pay all of our bills as we would like. If this has happened to you, take heart. It doesn’t mean that your score will remain low for the rest of your life. By simply resuming timely payment of your bills, or in the case of a bankruptcy, obtaining new, albeit more expensive credit, and paying on time will get your score back on track.

5: Keep “hard” credit inquiries to a minimum. A “hard” credit inquiry means that you’ve given someone, usually a creditor, permission to view your credit report. Too many “hard” inquiries over a short period of time can lower your credit score.

If you are hunting for a good credit card or loan, only apply for credit with the creditors offering the best terms for your situation.

In closing, the ultimate factor in determining your credit score is time. While accurate negative information will damage your score for a while, as time passes, its influence will decrease. If, in that same period of time, you take some of the affirmative steps outlined above, your credit score will certainly improve.

About the Author

One of the first steps to improve your credit score is to know what it is. Find out what yours is today and obtain a copy of your credit report as well.

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