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Increase Your Credit Score Today

By Ruth Racey
Published: Saturday, November 28th, 2009

If you are having a hard time finding a lender who will approve your loan application, it may be because you have bad credit.  Some lenders offer loans for people with poor credit, but these loans are usually accompanied by high interest rates and higher fees.  You may also find that the value of loans extended for people with bad credit are limited.

If you need to obtain a bigger loan, perhaps the best thing to do is improve your credit first.  Increasing your score should not be an impossible task, but the time you need to improve will of course depend on your present credit status.  If you have a score lower than 600 points, you may need to spend more than six months to reach a good credit score.

If the reason for the low score is the magnitude of your debts, then be determined and ready to make some changes in your lifestyle to pay off those debts.  Here are some things that you can do:

Reduce your personal costs.  This is the easiest way for you to add more to your debt repayment.  Find every possible way in cutting back on monthly costs.  This could mean giving up magazine subscriptions or switching to a lower cable plan, mobile plan, internet package, etc.

Get a second job.  To pay off debts sooner, you need to get a second source of income.  Perhaps working part time giving tutorials, baby sitting, or walking dogs is possible.  If you have a hobby, make money out of it by selling your handmade creations.

Do not use your credit cards.  You will only be adding insult to injury if you continue using credit cards for personal benefit.  It is too easy to buy more than what you need when using a card for shopping.

Reduce your utility bills.  You can significantly reduce the cost of monthly utilities by watching less TV, turning off the lights when not in use, and unplugging cables from the source especially if you are going to be out for a few days, etc.

Talk to your creditor.  Talking to creditors about your financial situation may seem embarrassing, but a lot of creditors would be most willing to help if you only try to reach out.  Let them know how you plan to pay off the debts and ask for help.  Perhaps they can waive the late fees or waive the monthly interest for the past months that you were not able to pay.  Negotiating with creditors is actually the best thing you can do to pay off debts and improve your credit.

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