10 Methods on How to Improve Your Credit Score

So, you’ve been a good person for many years. You’ve done charity work, you’ve volunteered to walk for breast cancer research, you’ve saved a kitten from a tree, you’ve given money and food to the local food closet, and you’ve provided shelter to those in need. You are someone who deserves good things for all of the good things you’ve done for others–too bad your credit score is too low for you to get that house you’ve been dreaming of or that car you wanted.
The three credit bureaus don’t care how good a person you are. If you’ve made credit mistakes in the past, you are stuck with the stigma of a low credit score. To get those good things you deserve, you need to improve your credit score.
Here are several tips you can use to improve your credit score.
Forget the Positive, Focus on the Negative
After you’ve gone through the rigors of downloading your free credit report, you will notice that there are two different areas of credit listed: positive and negative. The positive area you can totally ignore (unless you want to go through and take note of all the positive things you did for your credit), but the negative credit information is where the journey to an improved credit score begins.
The negative credit information is where all of the collections, charge-offs, late payments, defaults, tax liens, and other financial “oopses” are listed. Taking your time to go through and make note of where you’ve gone wrong is a great way to know where to start. To improve your credit score, you need to turn these negatives into positives by taking these following tips to heart.
Apply for Credit as Needed–ONLY
Just because the credit card company sent you a “pre-approved” credit card application, it doesn’t mean that you need it or even want it. Applying for a credit card or line of credit just because you can is a bad way to improve your credit score. The temptation to use and abuse the credit is strong, and you end up with ANOTHER negative credit blip on your credit score.
If the only way you can improve your credit score is to have a credit card or line of credit open and revolving, then by all means, get a card, but ONLY if you can do the following…
Pay on Time
One of the easiest ways to raise your credit score is to make credit card or loan payments on time. That means that if the payment is due on the 23rd, you pay it on the 20th. That gives your bank 2-3 business days to make sure the payment has been processed. When you pay on time, you won’t be late–commonsense, right? Slowly, over the course of the year, the three credit bureaus will continue to get positive reports on your payment habits, which means your score improves.
Negotiation is Key
If you cannot make your payments on time, or if you cannot afford the payment in full, don’t just ignore the date circled in red on your calendar–get off your butt, pick up your phone, and call the creditor. Speaking with the creditor about your situation is better than letting them think that you just don’t care. Nine times out of ten, the creditor is willing to work with you to delay the payment or take a smaller payment amount. They want their money, and they are willing to work with you to get it.
Don’t Fall Behind
If you cannot make payments at all, that can be a problem. In some cases, like with school loans, you can apply for forbearance or deferral, but with credit cards there isn’t much you can do to prevent your account from becoming overdue, the interest from piling up, and the collections calls from starting. If it comes right down to it, you should choose to pay your debt rather than go on a date. That $50 plus you were planning to spend on a night out can go to make even a small, negotiated payment to your credit card or loan.
Get current and stay current, this will work to improve your credit score even if there was a bit of negative reporting in the beginning.
You’re Not a Magician
Moving your debt around from card to card is a bad idea. Eventually, your lack of actual money will catch up with you and all of a sudden you owe money on five cards instead of two. Be smart about it. Pay NOW or regret it LATER.
Credit in Moderation
If you have one or two credit cards or loans you are using and paying on, keep it up! If you’re doing well with what you have, DO NOT take on more. Be patient, your credit score will improve and you will reap the benefits. It’s called delayed gratification, and it is MUCH better than immediate gratification (getting another credit card), and the bad credit it may bring.
Stay Under the Limit
So, you have a few credit cards that you use and pay on time. Great, but don’t think that maxing them out and then paying them down over the next few months is a good idea. If your credit limit is $500, NEVER use more than $100 of it. To make yourself look responsible to the three credit bureaus, you should never spend more than 20% of the card limit.
Keep ‘em Open
Another way to help raise your credit score is to leave all paid off credit accounts open on your credit report. Why? Well, just because they are paid off doesn’t mean that they can’t help you. YOU know that you aren’t using them, but the three credit bureaus see a credit account that is open, healthy, and positive–this can only HELP you improve your credit score.
BE RESPONSIBLE!
Finally, in order to improve your credit score, you need to be responsible with your money and your credit. Never take on more than you can handle, make all payments on time, pay off your credit cards, cut them up, and leave the accounts open on your report.
It may take a year or two, but eventually your score will be improved to the point that home loan officers won’t look at you funny when you come in to apply for a mortgage. You’re a good person; you deserve the things that having a good credit score can provide.
Now that you know a few tips to improve your credit score, what are you going to do now? If you have used these tips in the past, let us know about your experience!

Source: http://www.yourfinancessimplified.com/you-deserve-it-10-methods-on-how-to-improve-your-credit-score/

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