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In today’s market, having a high credit score is essential. Considering the lack of credit that is being made available for consumers these days, only the highest credit scores can expect to receive favorable loan terms, or even receive loans at all. The old standards for good credit scores have been thrown out the window, and the base scores needed to qualify for loans, mortgages and credit cards continue to climb. Additionally, more sources other than financial institutions have begun to use credit checks. Landlords will hesitate to rent to renters with low scores and employers can check credit to see if the applicant is trustworthy and responsible.
With this in mind, here are a few ways to raise your credit score should it be lower than you would like, and also some suggestions for keeping it high.
Raising your score:
If you’ve fallen on hard times, as many have in this economy, you’re credit score has probably taken a few hits. In order to repair your credit, you first need to be up to date on all of your payments. As long as you are delinquent you will still have that reported to the credit bureaus and your score will not improve. Keeping up with your payments and continuing to have a consistent credit line that you are in good standing on is essential to raising your credit score. Your credit score will still improve even if you charge a few groceries to your credit card and then pay the whole balance off.
Having several credit cards is also a plus for improving your credit score. The credit bureaus like to see that a borrower has several lines of credit that they are handling responsibly. To this end, it is better to spread your debt across several credit accounts rather than having one near its limit. The agencies take into account the amount of credit being issued to a borrower and the amount actually used. The lower the ratio, the better the credit score. Keep in mind you need to use all of the credit cards and not let them sit around, even if you charge something trivial on one or two just to keep them active.
If you already have a large amount of debt owed on a credit card, consider taking out a loan from a family member or friend. This can help you get back on track quickly and improve your score relatively fast, just make sure to pay back who you borrow from!
Maintaining your score:
Make automatic payments for your credit cards. Many banks and credit card companies will allow you to make automatic payments from your checking account to pay the balance of your cards. As long as you keep track of your card balances and ensure you have enough funds to cover the payments, this is a great way to stay on top of your payments and guarantee you wont forget to make a payment.
Additionally, its important to keep on top of your credit score. In today’s digital age, identity theft is a huge problem. If you notice charges or accounts on your credit report that aren’t yours, you need to contact the reporting agency and let them know as soon as possible to ensure your score stays where it should be.