Individuals seeking credit cards and loans who have bad or no credit often find out how difficult it is to obtain them without a high credit score. Regardless of how low an individual's score is, however, there are steps that can be taken to help increase credit scores.
Make Obtaining a Higher Credit Score a Priority
The first step in improving a credit score is to make this an important goal. There are online sources that provide free credit score check options. Once an individual discovers his or her current score, decide on a specific desired score. Create an online file titled "My Credit Score." Write down each step taken to gain a higher score.
Pay Bills On Time to Improve a Credit Score
Paying bills on time comprises 35% of the overall credit score. Each payment made on time thus helps improve a credit score. Keep a log by listing bills in one column. Record the planned date for paying every bill in the second column. Write down the date every bill is due as well as the amount that is due in the last two columns. Refer to this log each day as a reminder to pay bills in a timely manner.
Use No More Than 30 Percent of Available Credit
Spending no greater than 30% of available credit each month helps improve a credit score. Individuals can gain even higher credit scores by not using more than 10% of available credit each month.
Purchase a Secured Credit Card
Place as much money as possible on this card. Treat the card as if it were a normal credit card to improve a credit score faster than would otherwise be possible.
Do Not Close a Previous Credit Card Account
Once an individual pays off the previous credit card account, it is important not to close this account, as a credit score is partially based on the ratio of debt to credit. A large part of a credit score is its age. A credit score can thus be improved by keeping the account open for a relatively long period of time.
If a card account must be closed to prevent usage, cut it up and change the account password.
Open a New Account
Open any kind of new account. If an individual has little or zero credit, it will be necessary to open a couple different accounts to prove credit worthiness. New accounts can be for credit cards or bank loans, amongst others. Make sure to provide payments on time for new accounts.
Review Credit Score Goals
It is important to continually review and revise credit score goals. Include incentives for each credit milestone achieved. Readers might also be interested in learning more about credit card debt and how to safely emerge from debt.
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