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Top 5 Ways to Improve Your Credit Score

By Brian Anderson
Published: Monday, November 30th, 2009

Credit scores are a vital record of credit worthiness in today’s society. It is a 3 digit number ranging from 350-850. It represents the likelihood that a person will pay his/her debts. A credit score advice can be obtained from credit bureaus and lending institutions. There are several scoring methods but most lenders use the FICO system from Fair Isaac Corporation. This important number used to be hidden from consumers since they believe that it will only confuse them. Until recently, anybody can have a credit score advice. They can access it from credit reporting agencies and credit monitoring services. 

Here are 5 ways to improve your credit score:

  1. Pay your bills on time
    The best way to improve a credit score is to make credit payments on time-every time. Even making a single late payment dramatically affects a credit score. Your record of bill paying says a lot about how responsible you are with credit. When you have your credit score advice furnished, you will notice that those late payments still remain in your credit report for up to 7 years. Pay your monthly dues religiously.
  2. Keep your card balances at 25 percent or less of their credit limits
    30 percent of your score is based on outstanding debt. How many credit cards do you have that are at their credit limits? How much you owe on home or car loans? The bigger the gap between your balance and credit limit, the better. The more cards you have at their limits, the lower your score will be. Keep the level of your credit in check.
  3. Lessen your applications for a new credit. Don’t apply for a new credit often.
    Opening new credit accounts often is also a detriment to a credit score. It negatively affects your credit score for a short period of time.
  4. Keep older loans and lines open
    15 percent of your score is based on the length of time you’ve had credit. Having established credit is very important to a potential creditor. The longer you’ve had established credit, the better it is for your overall credit score. The more information about your past payment history gives a more accurate prediction of your future actions. It is vital to potential creditors knowing that they can rely upon a long term relationship.
  5. Try several different kinds of account but don’t overdo it
    A credit report will also measure the types of credit that a consumer uses. It         will help your score to show that you have had experience with several kinds of credit accounts, such as revolving credit accounts and installment loans. Since your credit score advice produces repot on your overall credit worthiness, the score itself is influenced by the types of debt that a person uses. Generally, a good mix of various loan types is desirable. 

Many people suffer from a credit that may be less than perfect. Obtaining a credit score is never too easy. Keep track of these five guides in which a credit score measures and watch your credit score improve.

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