Tips for a Good Credit Score
If you have been trying to get approved for a credit card or loan and have not had any luck, then your credit score may be to blame. A low credit score can also make it difficult for you to get a loan or credit card with a great interest rate. Fortunately, there are things that you can do in order to improve your credit score.
Make Sure Your Credit Reports are Correct
It is estimated that 20 percent of credit reports have at least one error on them. An error can cause your credit score to decrease. That is why it is important to check your credit reports to ensure that all of the information is correct.
Keep Your Credit Card Balances Low
High credit card balance can lower your credit score. Ideally, you should keep your credit utilization rate below 30 percent. For example, your credit limit is $3,000. You need to keep your balance at or below $1,000.
Pay off Past-Due Accounts
If you have a past-due account on your credit report, then you should pay it off as soon as possible. Once you pay off the account, it will show as paid on your credit report. Keep in mind that your payment history is one of the biggest factors that affects your credit score. That is why it is important to make an effort to pay all of your bills on time.
Do not Close Your Credit Cards
Many people think that if they have a credit card they are no longer using, then it is time for them to close it. However, closing your credit card accounts can lower your credit score by lowering your total credit limit. That is why it is a good idea to keep your credit card open even if you are not using it.
Dispute Old Mistakes
A foreclosure, bankruptcy and a short sale will hurt your credit score more than anything. However, these things will have less of an effect as time goes on. You can have these things disputed and removed from your credit report. There are also federal laws that limit the amount of time these things can stay on your credit report.
Get a Secured Credit
If you have a low credit score or no credit at all, then you should consider getting a secured credit card. You will have to make a down payment on the secured credit card before you use it. Your limit will be equivalent to your down payment. You will get a positive credit report every time that you make a payment.