Not only is it important to get your credit reports from the three credit bureaus, it is also important to know how to raise your credit score. A higher credit score makes it a lot easier for you when it is time for a new credit card, car loan or insurance policy. There are several steps one can adopt in order to raise the credit score.
The first step is to get the credit report and look for errors. You can get a free report once a year from each of the 3 bureaus and if you find errors like late payments which aren’t correct or missed payments etc. you can get them corrected immediately. The credit bureaus are under an obligation to inspect any wrong reporting and correct it within 30 days.
Another important step is to automate bill payments as missing them or being late will ruin your credit scores. Almost all banks have online bill payment services and you can transfer a fixed amount on a particular day. You can also opt for notification if you are going over credit limit, thereby preventing you from damaging your credit scores. Cleaning up your act isn’t difficult either. Staying current is advisable and you will witness your score rising soon enough. The negative weight given by FICO to missed payments, late payments, outstanding balances etc. reduces as you stay more and more consistent ensuring that eventually all the negative events disappear from your credit report.
One more thing to do would be to keep the credit card balance to as low as possible and well below the credit limit. How much a customer owes has a major bearing to his or her credit score, especially with respect to what credit limit the customer enjoys. Customers should also be especially careful with credit card balance transfers. Transferring to cards with lower interests is helpful sometimes as long as you don’t close your old accounts for some time as that will reduce your credit limit.
Paying card bills earlier than normal is advisable for higher outstanding balances. Running high outstanding balances at a given time could affect your credit score, even though you pay the bills at the end of the month. So when the credit scores are being calculated and reported, there wouldn’t be outstanding balances. It is also a good idea to keep and use the old cards so that the accounts are active.
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