| Free Tips to Improve Credit Score |
| By Credit Federal |
Published
07/16/2007
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Credit Report
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6 Tips to Improve Credit Scores
It's no secret that your credit score could be costing you high interest rates, and that if you improve credit scores you could save money.
Your FICO score; and other credit scoring systems, are used by creditors not only to decide if your credit card or loan application gets approved, but also to determine the amount (line of credit) and the interest rates you'll be charged.
And, it's even further reaching than that. Today many employers use credit scores as part of the job application screening, and even life insurance companies use it to determine your financial value and risk. Then there are other users, such as landlords.
Many factors can affect your credit score, such as late payments, bounced checks and bankruptcy. These 6 free tips can help improve credit scores.
- Get a secured credit card. Not only will this help prevent you from overspending and getting into debt (or deeper into debt), it is also easier for people in your situation to get accepted for a secured card versus an unsecured card. Secured cards require an initial cash deposit as collateral, and most won't let you spend more than your prefunded amount. Using the card to pay bills or to make purchases, the transactions are recorded and can be used to show timely payments. Use our drop down menu above to browse and apply for a secured card.
- Analyze your debt-to-income ratio, track expenses and eliminate unnecessary bills. Ideally, your bills (debt other than your mortgage), should be less than 15% of your gross pay (after taxes).
- Pay more than the required monthly minimum.
- Review all your credit terms and conditions. With some credit cards and lenders, they may raise your interest rate without notice if you breach any term/condition, such as failing to make a payment on time. Even if you make a late payment with some other creditor, all your creditors may raise your interest rate. Read the credit card fine print carefully for any such rate increase clauses.
- Check your credit report annually. This is so important, the federal government has made it a law for you to be provided a free credit report annually. Don't know how to read a credit report or understand its jargon? Consult with your local bank, lender or creditor.
- Be patient. As you add positive entries to your credit report, remember that some negative entries may linger for up to 7 years, or 10 years for bankruptcies. Afterwhich all late payments and bankruptcy entries are erased from your credit report. Just don't let any new negative entries get added.
Bookmark our website and return here often for important tips, updates and advice, as well as special credit offers for people of all credit scores, including bad credit people.
Free Personal Finance Software - Create your household personal budget to easily itemize and track expenses so you know where you spend your money most. Desktop software makes it easy to balance checkbook entries, or use the software as an electronic checkbook register.
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