Ways To Protect and Improve Your Credit Rating

Posted by Imam Larh on Sunday, 2 September 2018

Weaccounting - Your credit score calculates the amount of interest that you must pay for a loan or credit card. Increasing your score in just a few points will make a big difference in the interest rate you will pay for the purchase. If your credit score is high enough, you will not experience qualification problems for the best rates and loan conditions on car financing, home loans, and small business loans.

Ways To Protect and Improve Your Credit Rating
Ways To Protect and Improve Your Credit Rating

The following are some tips on how you can protect and improve your credit rating.

1 - Order your Credit Report.

Your credit score is based on your credit report, so you have to start by ordering your report and reviewing each one for accuracy. You can get your report from services like MyFico.com, or order from Equifax, Experian, and Trans Union separately online or by telephone.

2 - Check Your Credit Report Information for Inaccuracies.

Check to identify information for the name, social security number, date of birth, and wrong address. Make sure that the negative and the old paid in full are deleted. Check accounts and delinquency that are not yours, late payments, bills, lawsuits, appraisals, or tax liens paid more than seven years. Also, paid liens or valuations are listed as payments, duplicate collections, bankruptcy older than ten years and any negative information that is not yours.

3 - Always Pay Your Bills Timely.

Payment history forms more than a third of typical credit scores. If you pay late bills in the past, you can increase your credit score by starting to pay your bills on time. Lenders are looking for any sign that you might fail to pay, and late payments are a good indicator that you are in financial trouble.

4 - Maintain a Low Balance Credit Card.

Bringing a smaller balance is the best way to increase your credit score. The score measures how many limits you use on each credit card or other credit lines, and how many combined credit limits you use on all of your cards. In 60 days, paying credit card balances can increase your credit score by 20 points.

5 - Try Not to Open an In-Store Credit Card.

Even though your first credit account can function to build and improve your credit history, there are times when every subsequent credit application can reduce your score. New credit cards reduce the age of your credit history, and department store credit cards are not good evidence of creditworthiness. Every time you apply for a retailer's credit card, your credit shop will ring.

6 - Be Conservative When Applying for Credit.

Having at least one credit card older than 2 years can help your score up to 15 percent.
Make sure that your credit report is checked only if needed. Or, if you shop for a home, try applying for a loan within two weeks. By keeping the loan process within a two-week period, all credit report searches are seen as a single request.

7 - Don't Close Credit Cards or Other Rolling Accounts.

Turning off an unused account that has an outstanding balance without paying off the debt changes your "utilization ratio", which is the total amount of your debt divided by the total available credit. This will reduce the gap between the credit you use and the total credit available to you, and that can damage your credit score.

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