A great credit score is above 700, to improve your credit score there are steps to take. This is important when it is time to make a large purchase. The better your credit score, the lower interest rate companies will charge. In addition you will be able to qualify for a loan for that big ticket item you want to buy.
Check your credit score
Each year you are allowed one free credit report. Go to Annual Credit Report and check your current score. Look through the report to make sure there are no fraudulent or incorrect charges. If there are, talk to the company: Equifax, Experian or TransUnion. Many times these glitches are easily fixed. There will be steps you have to take, but it will be worth it. Your credit score will quickly go up.
Pay down credit cards
Take your credit cards and start paying them off as quickly as possible. First you should pay down the credit card with the highest interest rate. You can then apply the extra money towards the next credit card. Your credit score will improve with each credit card balance you lower. This will take a bit of time for most people.
Pay your bills on time
It is very important to pay each bill in a timely manner. This includes bills from your electric bill to your mortgage payment. One missed payment can lower your credit score. In addition this will save you money on late payment fees.
Don’t transfer accounts
Many credit card companies will offer you a chance of a lifetime. Transferring your balance from several credit cards and closing them to one credit card this will defeat the purpose of lowering your credit score. Your credit score is based on your ratio to credit card balance. Instead concentrate on lowering your credit card balances. Do not close your credit cards, keep them open. Your debt to credit ratio will improve.
If you don’t already have a budget, it is time to start. Begin by paying everything in cash. By paying cash you will stop increasing your debt and start living within your means. In addition it will prevent you from by unnecessary items.
Following these steps you will see your credit score improve. Budget your money and be patient. You will get there and have the score you have always desired.