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Easy Ways of Improving Your Credit Score

By Janet Lacey
Published: Tuesday, October 6th, 2009

Having good credit in today’s times is as important as holding a good job or having an assured income. A credit score of more than 700 can open a lot of doors and save you a lot of money while a poor credit score can end up making your poorer. If your credit score is 750 or above, you should be proud of yourself. However, if it is anything below, then you can work upon improving it since this can help you get credit at better rates and terms.

Some easy ways of improving your credit score are:

  • Pay On Time: Most of us have a number of loans and credit cards to pay off every month. Missing even a single payment or making late payments can put blemishes on your credit report and bring down your credit score. So the best and the most important thing that you need to do to in order to have a good credit score is to make all your payments on time. In case you are unable to make complete payments, at least ensure that the minimums are paid on all your accounts.
  • Automate Your Bill Pays: Most banks today offer bill pay services. Check with the bank where your salary gets deposited about bill pay and arrange for all your bills to be paid directly out of your bank account. In case you cannot afford to pay all bills in toto, at least make sure that the minimums are paid. This will not only save you from spending more than what you are earning, it will make sure that your payments always remain in the green.
  • Get Your Credit Limit Increased: Your debt to credit ratio is a major component of your credit score. The lower this figure will be, the higher will be your credit score. A good way of lowering your debt to credit ratio is to get your credit card companies to increase your credit limits. If you are using $2500 on a card with a $5000 limit, then getting the limit increased to $10,000 will reduce your credit usage from 50% to 25% of available credit. This will increase your credit score and make you more bankable in the eyes of credit companies and lenders.
  • Keep Checking Your Credit Report: You are authorized to a free credit report per year from all of the three credit bureaus—Experian, Transunion and Equifax. Get a free copy of your credit report every six months to check it for errors and discrepancies. In many cases, you may find a number of negative entries on your credit report which might not actually exist. For example, you might see a late pay where there has been none. Similarly, your credit limit on a card may be more than what is listed on your credit report. These simple errors often add up to a lower credit score. In case you find any errors on your credit report, then get back to the credit bureau reporting the erroneous detail and get it corrected.

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