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10
Ways to Improve Your Credit Score
by Bianca Raven
These days, it's more important than ever to make sure
your credit score is as high as you can get it. Banks
have tightened their belts so if your credit score is not
up to par, forget about putting in an application until
you've done some creative fixing. If you're thinking
about buying a house or a car any time soon, then finding
ways to improve your credit score becomes very important.
It really is possible to improve your credit score on
your own. Of course you can and it's not as difficult as
you think.
Let’s look at 10 simple things you can do to begin
improving your credit score today:
1) Know Your Current Score
Order a copy of your credit score from one of the three
major credit reporting bureaus.
Once you know what your current score is you’re in a
great position to figure out how to repair or increase
it!
2) Clean Up Your Credit Report
Sometimes credit problems and late payments are reported
incorrectly, or they should have been removed. Perhaps
someone has listed the wrong amount or even the wrong
company! If you see any mistakes on your report ask to
get them removed at once.
3) Change Repayment Times
Many bills arrive monthly or even quarterly. This can
sometimes make it difficult to keep the budget under
control.
If you get paid weekly or fortnightly, then divide your
bill into this amount and pay it every time you get paid.
For example: if your bill is $100 per month, make a
payment of $25 per week. It’s somtimes easier to
budget by paying smaller amounts off your bills each
pay-day on a more frequent basis.
When you pay your bills more frequently than your
creditors expect, your credit can actually improve. It's
also harder to fall behind when you've already made small
payments towards the total debt.
4) Increase Payment Amounts
Even paying a few extra cents off a debt or a bill can
help to improve your credit score. If you have a bill
that’s $97.50, round that figure up to $100 and pay
this amount. It's only and extra $2.50 per month - which
is less than 63 cents per week extra - so you won't miss
it in the budget.
This approach works even better when you couple it with
2) and pay the amount more frequently as well. Not only
are your payments more regular but you’re paying
more than you need to, which means you’re paying
your debts off quicker as well.
5) Re-Negotiate
Most credit cards carry huge interest rates and some even
carry penalty fees for overdue payments. Try calling your
lender and see if they'll negotiate for a lower rate or
reduced fees. Reducing your interest rate by a small
amount can have a positive impact on your cashflow,
leaving you with more money left in your pocket at the
end of each month.
6) Payment Plan
If you’re already behind on any repayments or bills,
ring the company involved and explain your situation. You
should know before you call what you're willing to offer,
but be sure your repayment plans are reasonable. Tell
them you’re willing to switch to weekly regular
payments. Offer to repay slightly more than the minimum
amount. Ask for an extension on the payment deadline.
When you've caught up on the late payments, stick to the
same budget so you don't risk falling behind again.
7) No Credit Cards
The worst thing you can do for your credit is to keep
building more debt. If you’re used to putting
everything you purchase on credit, you need to stop. Cut
up your cards. Ask yourself if you really need that item.
Question if you're really willing to pay 28% interest on
a pair of shoes.
If you still really want to buy a luxury item, either
save for it or put it on lay-away.
8) Reduce Debt
By mixing and matching all of the tips above, you should
find yourself a little extra cash at the end of each
week. This extra cash should be used to pay extra off
your outstanding bills and debts.
By lowering the amount of debt you have, you can really
help to improve your credit score quickly.
9) Spread Out Debt Levels
If you have one card that is maxxed out and another with
a low balance, spread the debt evenly between them. To a
credit reporting agency, this makes it look as though
you're further away from being totally maxxed out. It's
not an ideal fix, but it will help if you're looking to
borrow more money.
10) Get Professional Help
If all else fails, or if you're already in too deep,
don't be afraid to seek professional help. Places like
consumer credit counselling are there to help you. Never
be embarrassed about asking for help. There's nothing
shameful in trying to improve your situation. Be proud
that you're working to fix things!
If you plan to apply for further credit in the future,
then start using some of these tips to improve your
credit score today.
Bianca
Raven is a qualified financial advisor and freelance
finance columnist. You can see more of Bianca's finance
tips at her blog: http://ravens-writing.blogspot.com
Or you can see more credit tips here: http://personalmoneystore.com/moneyblog/2009/03/17/top-10-ways-increase-credit-score/
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