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Credit Scores and How to Increase them

By Brian Anderson
Published: Sunday, December 20th, 2009

At the end of the year, you receive a credit report showing the debts, mortgages and transactions you have made the entire year.  And below your credit report is a three digit number that will range from 350 to 800. This three digit code is your credit score.

A credit score is a numerical number based on statistical analysis of a person’s different transactions for the past year grading how high (or how low) a person’s credit worthiness is. This credit score can have great effect on future transactions such as rentals and interest fees to be paid. So it is best to keep this score up by following some credit score advice.

Credit score advice 1: Try for 700

A score of 700 or above is considered a high score for many creditors and banks. If you have this score, you will be entitled to many rental privileges and will be able to make loans with the lowest interest rate.    

Credit score advice 2: Pay all debts on time

All debts should be paid on time so as to prevent from getting any penalties from banks or credit companies. Not only will your credit score suffer but many credit companies also have fines for late payments so you could be loosing more than the money you are borrowing if you do not pay on time.

Credit score advice 3: Manage credit responsibility over time.

It is said that fixing ones credit score can be the same a loosing weight. It has to be done in time and there as no quick fix. If you have a low credit report, work slowly on improving this report. First identify the problem of your low credit report so that you can fix it before it becomes any bigger. Next is to set a goal and time span.

A good example here would be increasing your credit score by a hundred percent in the next five years. Remember that planning slowly but surely is the best way to go. Remember that a credit score is also largely based on your long term credit reports. And if you have a solid foundation of good credit reports, it will contribute to a better credit score. Be weary of different articles advertising quick fixes to your credit score because they often backfire if you are not careful.

Credit score advice 4: Practice discipline

The Last credit score advice may be the most important. You should always maintain discipline when dealing with credit. Unlike money, credit is spending something that you readily don’t have. You sow the price and reap the payments at a later time. This is not necessarily a threat in itself but without the proper discipline anyone can suffer from over spending.

Always internalize that before using your credit card, ask yourself “If I had the money to pay for this right now, will I still make this purchase?” credit cards and impulsive buying go together very well and you must make sure that the interest that you will pay will be worth the item that you will be purchasing.

Keep all credit score advice by heart so that next year you can expect your credit scores to go anywhere but down.

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