In this article, you will learn how to increase your credit score. A credit score is a number associated with a person’s credit report that indicates how good of a financial record that they have. When you apply for a loan such as a home mortgage or even a car loan, your FICO score is taken into account. This number ranges between 600 and 800. The higher the number, the better chance you have at getting the loan. On the other hand, if you have bad credit, it is very difficult to get a loan.
If you want to increase your good credit score, you need to start by cleaning up your credit report. You can do this yourself if you know what to look for on each of the three credit reports that are offered to consumers through the major credit bureaus Experian, Trans Union, and Equifax. Cleaning up your report will increase your score significantly as long as you get rid of any errors and do not try to re-apply for loans or credit cards right away.
If you are wondering how to increase your good credit vs. bad credit, the first thing that you can do is to make sure that you always pay your bills on time. Even if you just have to make a few extra payments, that is better than paying late and racking up interest charges. Another way to increase your score is to make sure that you do not open up any new accounts. Many people do this because it makes it easier to apply for more loans. If you have a lot of debt, you are more likely to get denied for a student loan or some type of credit card. Closing accounts can hurt your overall score if there are too many accounts that are opened in a short period of time.
In addition, remember that it is important to make all of your payments on time. This does not mean that you should skip a payment or be dishonest about it. Paying bills on time and always being respectful of your credit score is one of the best ways to get a good credit vs. a bad credit score. If you use credit wisely, paying off your debts and balancing your finances is going to help boost your credit score for the future.
Finally, be careful about what type of credit card you get. It is important to stay away from credit cards that have very high-interest rates. Always get yourself a credit card with a low-interest rate so that you will be able to get a good credit score. Also, get yourself a secured credit card if possible so that you will be able to build up some assets to make it easier to get a higher credit score.
If you follow the tips above, you will find that building a solid history of on-time payments, prompt payments and only making small purchases can help you achieve a good credit report score over time. As you work to rebuild your credit, be sure to avoid making any new applications for loans or credit cards until your report has healed from the errors and mistakes in the past. This way, you can avoid getting yourself into an even deeper hole than you started in. Once you do, you will be well on your way to a brighter financial future!
This post was written by Kristian D’An, owner of Lux Credit LLC and CCA board certified credit repair specialist. Lux Credit offers credit repair Companies for those looking to improve their credit!