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Quite simply… credit scores matter. A lot. So if your credit score isn’t the hottest, you may be wondering how to improve my credit score.
So much of your financial life depends on your credit score. It matters in whether or not you qualify for a home loan. And, if so, what your interest rate is. This applies if you want to get an auto load as well.
Also, employers will run a credit check on you before offering you a job. If you haven not proven to be financially responsible, that may affect your job offer. Even utility companies will look at your credit. This includes electric, water, cable and cell phones. Bad credit can affect your eligibility for service.
So, as you can see, it pays to make sure your credit score is as high as possible. So let’s look at ways you can improve it.
Here are some quick tips on how you can improve your credit score.
The first step would be to check your credit report, and clean it up. You can ask for a credit report from each of the top three nationwide reporting companies. Namely, the TransUnion, Equifax, and Experian.
Some people might be aware that everyone is entitled to a free report every 12 months. Once you have the report, you can print it, or save a copy on your computer. Or, you can do both.
The report will have a detailed summary of your credit score, so you need to examine everything. It may take some time, but it’s always better to be thorough with these. Look for any accounts that show any late payments, or any unpaid bills.
Also check for inaccuracies. The report should have information on where you can send a dispute if there are any inaccuracies.
This is important because you need to keep a clean credit report for your credit score, and if you find yourself job hunting down the road. There are some employers who pull credit reports to make their hiring decisions.
Next, you need to pay down your balance. Paying your balance is a great way to lower your rates, and improve your credit score. It’s a very obvious, but important step.
Sure, you may think that paying off your card once a month is enough. But in reality, creditors usually only report balances to the credit reporting companies once a month. This means that if you run up a big balance by the time they send that report, it could very well look like you’re overusing your credit.
The best way to go about this is to break up your credit card payments. This means sending payments at least twice a month. This will help keep your running balance lower. It also helps to pay any large purchases immediately.
Another great tip would be to increase your credit limit. If you are not in a position to pay your balances immediately, an opposite approach would be to improve your credit utilization rate. Try and increase your credit limit at least twice as much to instantly cut your credit utilization rate in half. However, the key here is to not overspend, and not spending any of your new credit.
You can also try opening up a new account from a different issuer. With this tip, however, you have to be careful. You do not want to open a lot of new accounts all at once. To the banks, it may look like you’re going on a spending spree. It’s always better to apply for one new card if you’re going to take this route.
Negotiate Your Debt
Did you know that you can also negotiate your debt? You can talk to a debt collector and try to negotiate your debt. It’s always worth a shot.