How to Improve Your Personal Credit Score

Quick Tips To Improve Your Personal Credit Score

With interest rates on the rise.  Everyone is looking to refinance as quickly as possible.  Its imperative that you improve your personal credit score before you apply for your refinance.  Even if you just want to  apply for a personal loan or a new credit card.  Improve your chances not just of approval but of getting the best rate by increasing your credit score.   Let’s discuss practical pointers on how you can use your personal credit score to get easy approval and enjoy better rates and terms:

Work on improving your debt to income ratio. How much of your credit limit has been used? Financial experts recommend not using up more than 50% of your limit. But what if you have a high credit-to-debt ratio? You can call your bank or credit card issuer and request for a higher credit line. Of course, the easiest way to free up your credit limit is to pay off your existing charges.

Insiders tip:  Sometimes when we are working with a business to get them financing, the owner has nearly maxed out his / her personal credit cards in order to run their business.  If they can’t pay it down, we ask them to call and get a credit line increase!  That way it looks like they are using a smaller percentage of their available credit and will give their credit report a quick credit score boost!

Obtain a copy credit report from all 3 major bureaus. Be sure to order a copy of your credit report from each of three major credit bureaus (Equifax, TransUnion, Experian). Take note that each credit bureau works on its own so the report you get from one bureau may be different from the other two.

Clean up your credit report. Check your credit report for possible errors or unauthorized charges. You don’t have to pay charges if they’re really not yours. You can dispute incorrect charges in your account by sending a letter to the creditor involved and the credit bureau that issued your report. This way, an investigation can take place immediately to have the errors corrected.

Pay off your existing bills. Raise your credit score the fast way by paying off all unpaid charges. What if this isn’t possible? Speak with your creditors and arrange for new repayment terms. Be open about your financial situation and explain why you’re asking for payment modifications. Most lenders are willing to cooperate especially if a customer is experiencing financial crisis due to circumstances such as divorce, loss of job, death or illness.

Pay off your high rate debts first. Pay your debt with the highest rate of interest first and work your way down. This is the best strategy to deal with multiple debts if you can’t pay off all debts at once.

Avoid new debts. Stay away from incurring new debts while you’re still under repayment. Focus on paying off your existing debts and use your monthly income to pay your creditors.

Improving your credit score can be a daunting task.  But by following the above tips you will be well on your way to improving your score.  Just don’t expect it to happen overnight.  For instance when you pay down your credit card it may not be reflected that month on your credit report.  Depending on when your creditor reports to the bureaus.  You may have  paid it off  a few days AFTER they reported, so it won’t be reflected that month, but it should be the following month.

One comment

  1. A way that a lot of people are starting to save money is to use prepaid credit cards. If you load exactly how much you plan on spending on food, gas etc and stick to it, you will find that you start to cut out the impulse buys.

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