Your Credit Report & Score, And Improving What Both Say About You
Your Credit Report & Score, And Improving What Both Say About You
There is one number in life that most people have a hard time managing in life, and that number is your credit score. This simple 3-digit number is the source of denied loans, denied credit cards, and denied job offers. But for others, this 3-digit number has been the source of life-long dreams that finally came true.
A high credit score is important because when you apply for a loan or a credit card, creditors and lenders want to know if you will pay them back. And although you may be a good person on the inside, there is no way of truly telling that you will pay them back. So they have to refer to your credit score and report to get a sense of who you are and how you make decisions financially.
If recently you haven't been paying your loans and credit card bills on time, this will show on your credit report and will ultimately lower your credit score - fast. Its takes time to rebuild your credit score but you can ruin it within a week if you're not careful of your finances. Because of this, its very important that you make it a top priority to pay your bills on time so that you can get the loans and card offers that you truly desire.
And if you think you can "get by" in life with a low credit score, then you cant. It is true that you can get a loan or credit card with a low credit score, but your score will be matched by a high interest rate and a credit limit that is much lower than you want it to be. This is only because you're looked upon as a risky person to lend money to. And if you're currently living off of your credit cards right now, then that assumption is right - wouldn't you agree?
So it's time to transition out of that "risky" group and move into the reliable group. And to do that, you have to learn how to increase your credit score. It will take time, but in the end, it will be more than worth it - in terms of peace of mind and financial security.
Here are some great tips on improving your credit score:
The first step is to get a copy of your credit report and score. You want to look at what is being reported about you to all 3 of the credit bureaus. And trust me, once you see what is noted, it will have a profound impact on how you see yourself. And this is a good thing. Because if there is something there that is negative, but its strong enough to inspire a change within your financial behavior - then this simple step was more than worth it. You also want to purchase a copy of your credit score.
After you've gotten the credit reports from Experian, TransUnion, and Equifax, you can cross-reference the 3 to check for any errors - or anything else that maybe currently lowering your score. You want to look for debts you've paid off long ago but are still being reported as delinquent. If you see anything of this nature on any 3 of the reports, you want to write a letter to the corresponding credit bureau along with proof that you've paid the bill off.
This one technique alone can significantly increase your credit score in as little as a month. And dont think that writing a letter to the credit bureaus wont help. They are required by law to correct any valid mistakes that you point out on your credit report.
The next thing you should start doing after you've taken a look at your credit reports is to start paying off your debts. You will want to develop the best tactic or strategy that you can at this point. The trick here is to pay off your loans to where your balance is only 30% of your credit limit. If you can get to this point, then you will increase your score nicely as a result of it.
But it should go without saying that while you're constantly paying down your bills, please do remember to make all payments on time - every month. A missed payment can do tremendous damage to your credit score, so be sure to make all payments on time. If you want to focus on one card at a time as your strategy - then fine. Do what works for you. But be sure to pay at the very least the minimum balance each month for each card.
If you can sustain this financially responsible credit habit of paying your bills on time, then you are well on your way to raising your credit score in no time at all.
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