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HOW TO IMPROVE CREDIT SCORE
Credit Score plays an important role when you apply for a credit card or loan. It is a 3 digit number that reveals the creditworthiness of an individual to banks and other financial institutions. Credit Score is calculated using your credit history, which contains information such as your payments history, number of loans or credit card used by you, etc, there are 3 major Credit Information Companies, namely Transunion, Experian, Equifax. A high credit score increases your chances of getting a loan or credit card and a low score completely ruins it. Banks do not like to give loans or credit cards to people with a low score because they do not trust them with their money. Despite having a low score, if you get a card or loan, then your credit limit may be low or you might have to pay a very high rate of interest. To prevent this, you must improve your credit score.
Check your Credit Score
One of the most important things that you must do to improve your credit score is check your credit report.Doing this will help yo to identifying errors in your report.
Pay Outstanding Bills
If you have out standing credit card bills or loan,you must pay it off immediately to repair or improve the score a bit.Payment history is one of the factors that is taking into consideration while calucating the credit score.
Credit Utilization
It is another major factor that is considered while calucating the credit score.The amount of credit that is availabile to you verses how much of it you are using shows your dependency on credit money.
Do not remove old accounts from reports
Some people tend to remove old account or deactivated accounts or accounts with neagative history from their credit report to make it look good.Some even try to get their old debts removed from their reports once they pay them. This may not be a very smart thing to do.
Plan your Credit
Many people whose scores fall drastically are ones who do not paln their finances well.If you apply for too many credit cards just to increase your credit limit,but are unable to pay the bills off on time of all of them
How long does it take to rebuild a credit score ?
If you have negative information on your credit report,such as late payments,a public record item(e.g.,bankruptcy) or too may inquries,you should pay your bills and wait.Time is your ally in improving your credit score.There is no quick fix for bad credit scores.