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3 ways you can gain a higher credit rating

By Karen Anderson
Published: Sunday, October 16th, 2011

Batting for that high credit score can be a challenge. To some veterans in this field, it’d be fairly easy for them because they have the knowledge and expertise regarding this matter. But to other people, like regular consumers, it can take several months (and perhaps, lots of money) to achieve the score they want. Despite the difficulty, the truth is that it is far from impossible.

In order to understand how you can get a high credit score, you must first know what constitutes a good credit history. First, all of your spending will be considered and are recorded by credit bureaus for future use. This is your credit history. Keep in mind that the credit bureaus list only your spending and payments; they do not compute your credit score. When you file for a loan, the financial institution (a bank or credit union) will pull out a copy of your credit history and then they will compute the score based on a standard set by FDIC and the firm’s guidelines. Because of this, your credit score can vary from one institution to another.

Second, credit score is affected by delayed payments and other missed or skipped ones. Hence, if you pay your bills on time, then you can have a clean credit record.

Third, rejections of applications such as for loans, insurance and credit cards will also reflect on your credit record. As bad as it sounds, it is really true. A form of rejection by one company means that they can’t risk having you as their client since you either have a bad credit record or they think that you’ll surely have a hard time paying them back.

There is really a steep price to pay once you incur a bad credit record mark. And reversing it to favor you can be difficult but is far from impossible. Clearing your name of bad credit marks can be challenging but is worth the time since you gain several advantages such as favorable payment schemes and lower interest rates for loans. Having good credit records will definitely benefit you in more ways than you can imagine. That’s why you should take it upon yourself to take care of your credit record yourself. Here are some ways on how you can do it:

1. Spend wisely. Knowing when to splurge and when to save for later can give you better grip of your financial state, thus, making your margin for bad credit marks smaller.

2. Be consistent in your payment plans. Being late for payments can not only be annoying to your lender or the company you’re in business with, but it also can be bad for your record. Debts should be paid right away so you can establish a good reputation.

3. Check your credit report regularly. Nothing beats a good prevention measure so make sure you catch the root of your financial problems by starting with precautionary moves. Keeping track of your credit standing thru constant checking of credit reports can almost cut the changes in half of having undocumented purchases and fraud attempts that may soon bring misfortune to your credit score.

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