Bringing Your Credit Score Up

Bringing your credit score up is very important. Your credit score is a number that helps lenders and others predict how likely you are to make your credit payments on time. Your credit score is based on what banks, stores and utility companies and other creditors have told the credit rating companies about how well you do with paying back what you owe. The system awards points based on information in the credit report, and the resulting score is compared to that of other consumers with similar profiles.

Your score gives lenders a way to know if they should or shouldn’t lend money to you. No lender wants to lend someone money who can’t ever seem to pay their bills, it poses too much of a risk. If your credit score is low and it shows you are consistently late with payments, companies are less likely going lend to you. The higher the risk you pose, the higher those interest payments are going to be. The quicker you pay your bills the higher your credit score will become.

Your credit score determines so many things. Credit scores determine whether you can get credit from companies and what you pay for credit cards, auto loans, mortgages and other kinds of credit. It’s the credit score that also makes it possible to get instant credit at places like electronics stores and department stores. For most kinds of credit scores, higher scores mean you are more likely to be approved and pay a lower interest rate on new credit. Having good credit scores makes a lot easier and can save you money in lower interest rates.

Credit scores also effect if you can rent a place of your own and how much they will charge you. Without good scores, your apartment application may be turned down. Your scores also may determine how big a deposit you will have to pay for your telephone, electricity or gas service.

So, if your credit score is low, it is crucial to work to bring it up. Bringing your credit score up will greatly affect your financial situations and decisions. Here are some basic steps in bringing your credit score up:

Check credit report for errors
It’s important that you check your credit report frequently to be sure that it is accurate. Some people find that there are debts showing on their report that has already been paid off. Sometimes there are late payment marks that are incorrect. In some cases people may even be the victim of identity theft and find that there are accounts on the report that aren’t even theirs.

Pay your bills as soon as you get them
It is very important to pay your bills on time!! If you want to boost your credit score back up again, you need to be sure that you pay all of your bills on time. The more consistently you do this, the better your credit score will begin to look. If you are looking for a company to lend to you then they will want to make sure that you pay your bills on time. If your credit score is low and it shows you are consistently late with payments, companies are less likely going lend to you.

Reduce your debt
By reducing your debt, lenders will see that you can afford another bill every month. If you have a lot of debt then they think that you will less likely be able to add on another expense. Reducing debt is a great way to raise your credit score. Also, if you are borrowing up to the full amount of your credit limits then that also hurts your credit. Reducing those balances will also help increase your credit score.

Keep paid off accounts open
Once you pay off those accounts, it is best to leave them open. Many people have been taught that they should close accounts when they pay them off, but this can actually hurt your credit score. If you just shut them down, then it looks as if you have a higher amount of debt compared to the credit available. Just keeping a couple paid off credit card accounts open can make your credit score a bit higher for you.

Don’t apply for new credit cards or accounts
Just applying for new credit cards and accounts can affect your credit score quite a bit. This will give something else for lenders to look at and checking your credit score repeatedly can easily lower it. You don’t want lenders thinking that you can’t pay all your bills on time. Just sticking with current credit cards and not applying and opening new ones will help increase your credit score over time.

Build a solid payment history
Your payment history is a vital part of your credit score, so you need to make sure that all your accounts are up to date and don’t show late payments. Pay off past due accounts, and then concentrate on paying your bills consistently before the due date. The earlier you pay your bills, the better it looks on your credit history. If you forget to mail your payment in on time, consider paying with automatic bill payment options through your bank or online.

Bringing your credit score up is very important to your personal finances and is vital to keep control of it. Your credit score can affect everything from loans and credit cards, to your ability to find work and housing. Bringing your credit score up should be the main focus of your financial planning, and you should always try to keep on top of your debt. Always pay your bills on time and if you have a low credit score, then it is important work to make it better.