Five top tips to improve your credit score

With the monetary state of affairs as it is, more and more people these days are looking for ways to improve their credit score. Your credit score is a key issue that demonstrates to lenders whether you are credit worthy and a high-quality prospect to give to. If you ever choose credit, whether it is a new credit card, a personal loan, financing for an auto or further purchase, or a mortgage, you will find that your credit score is crucial.

It is a fact of life that all lending agencies use this figure to come to a decision whether to extend credit to an individual. The worse the credit score, the worse the odds of getting loans. What is more, if you have a small credit score then even if a loan is obtained, it is liable to involve a upper rate of interest. This is for the reason that a credit score is also used to fix interest rates and the conditions of repayment in some cases. It may not seem reasonable but the logic is that if you have a low score then the business is taking more of a chance in lending to you. They counteract that risk by charging higher interest.

Luckily there are several things that you can do to increase your credit score and become suitable for loans at improved rates. Here are our top tips for raising your credit score.

1. Fix any mistakes in your credit report.

You have the right to see a copy of your credit report from the major credit agencies and ask for any mistakes to be corrected. They will help you with directions on how to put right any errors that you find. You will need evidence of your payments, for example bank statements. This is the simplest and quickest way to fix your credit score.

2. Make all of your payments on time.

The principal reason in determining a person's credit score is their payment history for any past finance that they have had. This goes back several years and although there may not be much that you can do to influence what your payment history has been in the past, you can make sure that from now on you make all of your payments on their due date. You almost certainly need to work out a financial plan so that you can do this. It's almost certainly the most important step in sorting out your debt issues so why not sit down and do it right now?

3. If workable, pay a little more than the bare minimum.

With credit cards you as a rule have a choice to either pay the minimum monthly amount or more. Do pay more if you possibly can. Even if it is only $5 over the minimum, it looks good. It is clear that you are trying to clear the debt.

4. Do not max out your cards.

In the same way you should keep your card balance always below your maximum credit limit. If you pay the minimum each month plus paying off anything that you used the card for during that month, your balances will slowly come down. All of these plans will help to enhance your credit score.

In conclusion, try to stay with your present card accounts until you have them paid off. Do not keep switching to get new offers since this will not increase your credit score.