How to Increase your Credit Score

Your credit score has a great impact on your lifestyle. If you have an excellent credit score of almost over 700, you will not have much financial problems even if you have a financial crisis such as a job loss. On the other hand, if you have a low credit score of less then 300, you will face many problems such as high interest rates on loans and some banks might even refuse to give you a loan. There are a number of ways to increase your credit score and although the process is simple enough, it might still take quite some time before you get a good credit score.  This article will provide you clear instructions.

The first thing to do is to get your hands on your credit score report. FICO credit scores are the most widely used credit scores by different lending institutions. You can get your FICO credit score here. Once you have gotten your hands on your credit score, check if it contains any errors or mistakes. Sometimes these mistakes can make all the difference between a good and bad credit score. These mistakes can be late payment of bills, loans, wrong credit card details etc so look carefully for them.

Many people might find it surprising but a credit card, if used correctly increases your credit score. Do not cross the card limit at any cost, as it would negatively affect your credit score. Rather then that, plan your shopping in advance so that you do not cross it. Another thing to do with your credit card would be to use less then 30% of the credit limit of the card. This would greatly improve your score. Use multiple credit cards and keep cycling them so that you use less then 30% of the card limit. Using more then one card carefully will have a positive effect on your credit score. Furthermore, if you have an old credit card lying around that you have not used for quite some time and might have been disabled, enable it as it would also increase your credit score. The overall strategy here is to cycle through as many credit cards as possible to keep them active and using less then 30% of the credit limit.

You must pay all your debts, loans, credit cards, bills on time. Keep a good relationship with your lender or bank so that even if you accidentally miss a payment, you can request them to delete it from your history. Furthermore, students tend to take student loans and then do not take care about returning the loans on time. This greatly hurts the score and causes them problems later in life. They should get a job in the grace period and repay these loans as soon as possible. Rather then waiting for the loan return dates, if possible, return the loans as soon as possible as it would have a huge positive effect on your credit score.

Overall credit score is not something that can be improved overnight. It requires good planning, careful budget managing and a cool head to manage all your financial affairs in such a way that it increases your credit score without causing any financial problems for you.