Improving Your Credit Score

Your credit score is what lenders use to assess their risk in loaning you money. Your credit score is based on the information in your credit report, so first analyze your credit report and look for errors that could be effecting your score. Improving your score can help you get approved for lines of credit easier with lower interest rates, thereby saving you money.

Once you know your score, follow these easy tips to improve your rating:

1. Pay your bills on time consistently. Late and missed payments, especially accounts that have been sent to collections, have major impacts on your score.

2. Keep balances low on all of your credit cards. Maxing out your credit cards will lower your score, possibly by as much as 70 points.

3. Avoid opening or closing a lot of new credit cards at once. It may seem like a quick fix, however a significant amount of new credit will harm your score, and closed accounts can still have an impact.

4. Use the credit you have wisely. Manage your current accounts, by making payments on time and being aware of balances and limits, to prove to lenders you are responsible with your credit.

5. Moving debt around (e.g. consolidating the debt on your cards) without paying any of it off can lower your score. Keep your debt where it is and focus on paying it off.

6. Check your credit report often to spot errors quickly and track progress.

7. Avoid credit repair agencies that promise an instant fix. Rebuilding your credit takes time, and any agency that guarantees instant credit repair is only looking to exploit people in need.