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How to increase the credit score

By Janet Lacey
Published: Tuesday, January 15th, 2013

A lot of people have no idea what the credit score is; this is the reason why, in case they apply for a loan and don’t obtain it, they are very shocked. If you have a bad credit score, you should not be shocked for not receiving the loan you applied for; the credit score is basically a numerical interpretation that shows creditors what your past credit behavior is. Using the credit score, creditors can decide whether or not a possible client represents a good client or one that should be avoided and refused.

If you want to make sure that your credit score is a good one in order to get a loan whenever a situation that demands it appear, then you should direct your attention towards the timely payments. Make sure that you don’t miss a payment, as the payment history represents 35% of the whole credit score. Banks and other financial institutions that offer loans direct a lot of their attention towards the timely payments; they are interested in getting their monthly premiums in time and this is the reason why this part represents no less than 35% of the entire credit score. A major drag on your credit score will surely appear in case you constantly miss your payments; if you have a bad credit score, then the best thing you can do in order to improve it is to direct a lot of your attention towards the timely payments and to fight for respecting the terms.

Another way in which you can increase the credit score is by keeping the amounts owed to low levels. It is better to first cover an owed amount and ask for a new loan only after the first one has been cleared out, as this will keep the debt as low as possible; this part represents 30% of the credit score, so it is a good idea to make sure that the debt is low. Extending the credit history is another way in which you have the chance to increase the credit score. Every single month during which you make timely payments and during which you make sure that the debt in kept at a low level shows how responsible you are and demonstrates creditors that you are a good client. As you can see, there are plenty of ways in which the credit score can be increased, so if you have a bad one, there are no reasons to despair!

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