Tips On The Cheapest Ways To Improve Your Credit Score

With the current global economic hardships, a high credit score can ease the financial burden

. The score reflects the financial history of an individual. Many financial institutions have set a high benchmark score for low interest rate loan applications. Employers also ask for a high score in job recruitment and promotion. The following tips can be used to improve credit score.

Paying bills at the right time is one of the surest ways to raise the rating. Late payments have disastrous effects on the rating. You should avoid defaulting on monthly loan or mortgage repayments. Loan defaults will reflect on the rating report for seven years. In case of financial difficulties, try to negotiate for a new repayment schedule.

The balances on cards should be kept low. Make it a routine to keep the balances below 35% of the card limit. The balances should show a reducing trend at any given time. Having multiple cards that are well managed can increase the rating tremendously. Provided the interest you are paying is acceptable, keep low balances and the results will be fantastic.

You should not close unused accounts. The length of credit history affects the rating. A long and positive history will contribute to the rating even if the account is inactive. If you have several cards that you do not use, just keep them in the house. However, it is advisable to keep the number of cards below six.

You should avoid bankruptcy. An application for bankruptcy will lower the rating by a big margin. It will also reflect on the report for the next ten years. Mortgage institutions and car loan financiers automatically reject applications with bankruptcy entries. Building your rating after a bankruptcy is demanding.

Correcting wrong entries in the three reports will boost the rating immediately. The people you owe can easily make unintentional errors. Similarly, outdated information can be reflected on the reports. When you detect a mistake, post a dispute immediately so that it can be fixed in the shortest time possible. It can take up to 30 days for a correction to be made.

Avoiding excess inquiries is beneficial. Note that loan applications are always reported to one or even the three agencies responsible for rating. These inquiries remain listed on your report for 2 years. Many inquiries within a short time can have a severe effect on your rating. It is only mortgage and car loan inquiries that are allowable over a short duration.

It is wise to keep away from credit repair firms. These firms can give misleading information. Most of them are run by incompetent people and their advice will only worsen your rating. Instead of approaching the companies, seek help for any of the three rating agencies. The agencies offer free services and the best information.

Simply avoid unnecessary credit. Unless something is a basic necessity, try to keep away from it when you do not have enough cash. Similarly, do not apply cards with retail stores that you rarely visit. You should also ensure that paid court judgments are settled on the report. All the above tips can help improve credit score cheaply.

by: David Searman

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