5 Sure Steps to Better Credit

You don’t need to wait until you suffer from bad credit or a poor score before improving your personal credit. Remember, a higher credit score will open to you many doors of opportunities, when it comes to financial matters. Listed below are five sure steps for a better credit score: Examine your personal credit report. You can order a free copy of your credit report from each of the three major credit bureaus from www.annualcreditreport.com. Visit the website or call 877-322-8228. You may also print out the Annual Credit Report Request Form online and send it via registered mail to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. This is the only free resource authorized by the government so do not attempt to request from other resources. Correct credit reporting errors. If you discover errors or inaccurate information in your report, request for corrections at once. This can be done by sending a dispute letter to the bureau that issued your report. Upon receiving your letter, investigation can take up to 30 days. If found valid, the bureau will send an updated copy of your report through mail. Stay current with your payments. You might already know this advice but there’s no other way around it. If you are enjoying good credit, you can maintain it by submitting your payments on time. On the other hand, if you have a problem with your credit score, you can improve it one step at a time by paying all your creditors promptly. If remembering your schedule of payment is a problem, set up automatic payment with your bank to make sure that you will not miss a single deadline. Just make sure that you have sufficient funds in your account to avoid overdraft fees. rnUnderstand how credit scoring works. Your credit score is calculated based on a number of factors. While timely payment has a huge impact on your credit (35%), it’s not the only thing that matters. Credit utilization makes up 30% of your total score so you should avoid maximizing or exceeding your limit. Other factors that can make or break your score are the length of your credit history (15%), types of credit you own (10%), and credit inquiries from creditors (10%). Understanding how credit scoring works is important to avoid mistakes that can hurt your credit. Diversify your credit. It’s a good idea to manage different types of accounts rather than just one. For example, some people think that acquiring a number of credit cards will boost their credit score. Nevertheless, it’s not on the number of credit cards you own but how well you manage your payments. If you can acquire a personal loan, a car loan or a mortgage loan, you will be able to prove how efficient you are in handling credit and repayment. Creditors who will inquire your credit will be more impressed to see a diversity in the accounts you own.