No Quick Fixes for Improving Credit Scores
- By John Rasor
- Published 08/13/2009
- Investing
John Rasor
View all articles by John Rasor
There are no quick fixes for improving your credit scores.
However, you can increase your scores over time by
demonstrating that you consistently manage your finances
responsibly. Take a peek at these ten tips to live by if
you want a good credit rating:
1. Pay your bills on time. This is the most obvious and
best way to improve your scores, and it's never too late to
start. Even if you've had bad credit in the past, those
will count less over time if you keep paying your bills on
time.
2. Keep credit card balances low. High outstanding debt can
pull down your score. Never max out your credit cards or
carry balances that exceed more than half of the total
credit limit.
3. Check your credit report regularly for accuracy. It's
possible that there may be inaccurate information on your
credit report that can be easily cleared up If this proves
to be the case, then you should contact one of the three
credit reporting agencies-TransUnion , Experian or Equifax.
On-line dispute for each bureau: EquifaxDispute online
ExperianDispute online TransUnionDispute online
4. Pay down your debt rather than transferring balances.
Consolidating your credit card debt onto one card or
spreading it over multiple cards will not improve your
score in the long run. It may save you interest charges
temporarily though. The most effective way to improve your
score is by simply paying down the amount you owe.
5. Do not close any credit card accounts. In general,
having credit cards and installment loans that you pay on
time will raise your score. This is what we refer to as
credit depth. Even if you don't use them, keep them open as
this will demonstrate stability. Someone who has no credit
cards tends to have a lower score than someone who has
managed credit cards responsibly.
6. If you have no credit history, don't open too many
accounts to soon. Opening too many accounts in too short of
a time period can look risky because you are taking on a
lot of possible debt. Try secured credit cards to quickly
establish a history of credit for yourself.
7. Enroll in identity theft protection. You don't have time
to constantly monitor your credit. Leave that to the watch
dogs at Identity Guard. Or choose one of several services
designed to protect your credit.
8. Don't live beyond your means. Make paying your bills and
buying only essential items your main priority. Carefully
weigh the importance of all new purchases against the
greater importance of reestablishing your good credit.
Getting a handle on your spending, paying bills on time,
and paying down credit cards takes a long-term commitment
and strong self-control. It won't always be easy, but the
effort will pay off once you see your credit scores improve.
9. Know what's on your credit report and resolve any
discrepancies. Even if you believe you have a good credit
score, it is still wise to check with credit reporting
agencies to make sure they contain a similar view of your
credit history. It's also wise to make sure there are no
errors on your report, such as name misspellings or
incorrect addresses.
10. Consult with a reputable consumer credit counseling
service if all else fails.
This won't improve your score immediately, but the sooner
you begin managing your credit well and making timely
payments, the sooner your score will get better. Plan to
pay your bills on time and follow through.
If you have a history of poor credit or think that you
might, it's important that you find out and take the steps
to improve it. It will take time, but with discipline, you
may expect to see improvement in as little as six months.
You see, creditors are interested in a track record. You'll
have to prove that you consistently pay your creditors on
time and that you can effectively pay down your debt.
Paying down your credit card balances will not only improve
your credit rating over time, but you'll be in a better
position to negotiate a lower interest rate for your cards.
In general having good credit will get you better rates on
just about everything you can think of from Home loans to
insurance rates. What's your credit score?
However, you can increase your scores over time by
demonstrating that you consistently manage your finances
responsibly. Take a peek at these ten tips to live by if
you want a good credit rating:
1. Pay your bills on time. This is the most obvious and
best way to improve your scores, and it's never too late to
start. Even if you've had bad credit in the past, those
will count less over time if you keep paying your bills on
time.
2. Keep credit card balances low. High outstanding debt can
pull down your score. Never max out your credit cards or
carry balances that exceed more than half of the total
credit limit.
3. Check your credit report regularly for accuracy. It's
possible that there may be inaccurate information on your
credit report that can be easily cleared up If this proves
to be the case, then you should contact one of the three
credit reporting agencies-TransUnion , Experian or Equifax.
On-line dispute for each bureau: EquifaxDispute online
ExperianDispute online TransUnionDispute online
4. Pay down your debt rather than transferring balances.
Consolidating your credit card debt onto one card or
spreading it over multiple cards will not improve your
score in the long run. It may save you interest charges
temporarily though. The most effective way to improve your
score is by simply paying down the amount you owe.
5. Do not close any credit card accounts. In general,
having credit cards and installment loans that you pay on
time will raise your score. This is what we refer to as
credit depth. Even if you don't use them, keep them open as
this will demonstrate stability. Someone who has no credit
cards tends to have a lower score than someone who has
managed credit cards responsibly.
6. If you have no credit history, don't open too many
accounts to soon. Opening too many accounts in too short of
a time period can look risky because you are taking on a
lot of possible debt. Try secured credit cards to quickly
establish a history of credit for yourself.
7. Enroll in identity theft protection. You don't have time
to constantly monitor your credit. Leave that to the watch
dogs at Identity Guard. Or choose one of several services
designed to protect your credit.
8. Don't live beyond your means. Make paying your bills and
buying only essential items your main priority. Carefully
weigh the importance of all new purchases against the
greater importance of reestablishing your good credit.
Getting a handle on your spending, paying bills on time,
and paying down credit cards takes a long-term commitment
and strong self-control. It won't always be easy, but the
effort will pay off once you see your credit scores improve.
9. Know what's on your credit report and resolve any
discrepancies. Even if you believe you have a good credit
score, it is still wise to check with credit reporting
agencies to make sure they contain a similar view of your
credit history. It's also wise to make sure there are no
errors on your report, such as name misspellings or
incorrect addresses.
10. Consult with a reputable consumer credit counseling
service if all else fails.
This won't improve your score immediately, but the sooner
you begin managing your credit well and making timely
payments, the sooner your score will get better. Plan to
pay your bills on time and follow through.
If you have a history of poor credit or think that you
might, it's important that you find out and take the steps
to improve it. It will take time, but with discipline, you
may expect to see improvement in as little as six months.
You see, creditors are interested in a track record. You'll
have to prove that you consistently pay your creditors on
time and that you can effectively pay down your debt.
Paying down your credit card balances will not only improve
your credit rating over time, but you'll be in a better
position to negotiate a lower interest rate for your cards.
In general having good credit will get you better rates on
just about everything you can think of from Home loans to
insurance rates. What's your credit score?