How To Raise Your Credit Score

Your credit score is a way for others to see how you handle debt. It shows them if you pay your debt off on time and if you are responsible. Companies essentially want to know what kind of risk you will be to their business. So, the lower your credit score the higher risk you are. The higher your credit score, the more perks you will have when working with other companies. Here’s a look at how to raise your credit score,

There are a number of ways to improve your credit score:

Pay your bills as soon as you get them
Paying your bills on time is very important! If you are looking for a company to lend to you then they will want to make sure that you know how to pay your bills on time. 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 to give you a good deal. 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.

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. Some people also think that continually switching their debt to 0% interest rated cards will help their credit, and in reality it hurts it. Continually switching to lower interest rated accounts and never paying off the debt just show that you cannot pay your debt off. Again, this look bad to any lenders and it only decreases your credit score.

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. Again, lenders will look at this and wonder if you are going to be able to pay all your bills on time. Just remember sticking with current credit cards and not feeling the need to keep applying and opening new ones will help increase your credit score over time.

Pay any new accounts responsibly
Make sure if you do need to open a new account to pay it of quickly and responsibly. The faster you can pay your account off, the quicker your credit score will raise. This shows that you are responsible and this will only help your business with other companies in the future. It’s also important to make sure you don’t open multiple accounts in a short amount of time. Doing this will hurt your credit score. Also, shop around and know that you are getting the best interest rate on any account you open.

Review your credit score
Get and review your credit score report. It is important to know where your score is at and to make sure there aren’t any mistakes that have been made that will negatively affect your credit score.

Raising your credit score is obviously very important to your personal finances and is vital to keep control of it. Your credit score can affects everything from loans and credit cards, to your ability to find work and housing. Raising your credit score should be the main focus of your financial planning, and you should always try to keep on top of your debt. Knowing how to raise your credit score will make your life a lot happier and it will be a lot easier when it comes time to get a home, a job or even a credit card.