Having a good credit score is incredibly important. Your credit score determines your ability to be able to buy any type of product or service at a lower rate. A bad credit score can cost you hundreds of thousands of dollars in interest over your lifetime. That is why it is so important that you have an A1 credit score if you are going to finance your purchases. If you have a bad credit score, you do not need to worry. There are a few ways that you can improve your credit score. Let’s take a look at them.
Paying off old debts
The first step to improving your credit score is to start by getting rid of old debts. You need to pay off any old collection accounts and debts that are listed as past due on your account. Removing these old balances will give your credit score a boost and reduce the amount of outstanding debt that you need to pay.
Reduce your balances
It is not just a matter of paying your bills on time to have a great credit score. You need to keep your balances significantly below their credit limit if you want to have a really good credit score. The credit bureaus will not give you the best credit rating if you are close to bumping up against your credit limit. Using less than 30% of your available credit for each account helps your credit score and makes you credit worthy to potential lenders.
Get a credit card
If you are in the process of rebuilding your credit, you need to open some type of credit account to improve your score. Building a history of paying on time is an important step on the road to good credit. Get a secured credit card if you can qualify for one. If you cannot, then get an unsecured card. Use the card to make one small purchase and pay it off immediately. You do not have to carry a balance to start building a good credit score.
Get rid of errors
It is bad enough that you get penalized for credit mistakes that you have made in the past. You do not need to pay for the mistakes that others have made. Credit errors are a lot more common than you may think. Your credit report may contain wrongful information that belongs to a family member or someone else. Check through your credit report and make sure that all of the debts listed are actually yours. Make sure that balances are current and the payment history is correct.
Talk to your creditors
Ask a lender to remove some of your delinquencies on your credit report. You can sometimes convince a creditor that a late payment made was simply an oversight or an accidental mistake. Talk to your creditors and ask them to cancel reporting your payment as late. Many of your creditors will do this if you have a history of making your payments on time and are a good customer.