How Can I Improve My Credit Rating?
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Lexington Law
Providing credit repair services since 1991, Lexington Law has helped over 500,000 clients legally take on their credit. Last year alone, Lexington Law helped clients remove over 600,000 negative items from their credit reports. Visit http://www.lexingtonlaw.com for more information. By Lexington Law
Published on 08/20/2009
Millions of people throughout the U.S. contend with the effects of having <a href="http://www.lexingtonlaw.com/credit-education/bad-credit/"> bad credit</a>. Some are turned down for credit cards or car loans, others learn their applications for a new home loan have been rejected. If you are experiencing the restrictions that get imposed on people with poor credit, you may already know your credit score is in need of repair.
How Do I Fix My Credit Rating?
Each day, millions of consumers across the U.S. contend with the effects of having a poor credit rating. Some are turned down for credit cards or vehicle loans, others find out their applications for a new home loan have been denied. If you're experiencing the limitations that can result from having poor credit, you may already realize that your credit reports are in need of repair. These days, getting information about how to repair your credit score doesn't need to be frustrating or stressful, thanks the wealth of financial information and resources available to consumers.
* Pay your bills on time - Payment history makes up 35 percent of your credit score. Missing multiple payments can quickly drop your credit score but since the effect of a late payment diminishes over time, concentrating on making all payments on time from now on will move your credit score in the right direction.
* Contact your creditors if you are having a hard time making payments - If you expect that you will not be able to keep up to date on loan or credit card payments, you may be able to make arrangements with your creditors such as temporarily deferring payments that will help you get back on top of things. In the end, you could end up paying more in the long run, but if it keeps you from getting further behind, it will be worth it for your long term finances and for your credit rating.
* Try to keep low balances on your credit cards - Outstanding debt makes up 30 percent of your credit score. The closer you are to reaching the limit on your credit cards, the less stable your finances will appear. Keeping credit card balances below 30 percent of the limit will make your utilization ratio look better which will be reflected positively in your credit score.
* Avoid shifting your debt between credit cards - Transferring debts to a lower interest rate credit card is a solid strategy when working to whittle down debt, but constantly transferring balances between credit cards looks like you are robbing Peter to pay Paul in lieu of of being able to make your monthly payments.
* Carefully study loan or credit applications before accepting - Some loans, including department store cards, are loaded with fine print and other strings attached that can end up causing big problems down the road. For example, some no payment, no interest financing programs offered by retailers include rates that can skyrocket if you are late on a single payment and clauses where you may still be responsible for interest calculated during the "no interest" period.
* Look into credit repair services - For people who need additional assistance addressing their bad credit, another excellent resource for consumers are professional credit repair services. Professionals can provide their valuable expertise on important matters like disputing the questionable negative listings on your credit report and specific steps you can take to make the most of your credit score.
Tips to Increase Your Credit
Credit scores are a tool used by businesses and lenders to determine the likelihood a borrower will repay their loan. Fortunately , this rating is not set in stone. It can take time, but there are things you may be able to do to increase your credit score.* Pay your bills on time - Payment history makes up 35 percent of your credit score. Missing multiple payments can quickly drop your credit score but since the effect of a late payment diminishes over time, concentrating on making all payments on time from now on will move your credit score in the right direction.
* Contact your creditors if you are having a hard time making payments - If you expect that you will not be able to keep up to date on loan or credit card payments, you may be able to make arrangements with your creditors such as temporarily deferring payments that will help you get back on top of things. In the end, you could end up paying more in the long run, but if it keeps you from getting further behind, it will be worth it for your long term finances and for your credit rating.
* Try to keep low balances on your credit cards - Outstanding debt makes up 30 percent of your credit score. The closer you are to reaching the limit on your credit cards, the less stable your finances will appear. Keeping credit card balances below 30 percent of the limit will make your utilization ratio look better which will be reflected positively in your credit score.
* Avoid shifting your debt between credit cards - Transferring debts to a lower interest rate credit card is a solid strategy when working to whittle down debt, but constantly transferring balances between credit cards looks like you are robbing Peter to pay Paul in lieu of of being able to make your monthly payments.
* Carefully study loan or credit applications before accepting - Some loans, including department store cards, are loaded with fine print and other strings attached that can end up causing big problems down the road. For example, some no payment, no interest financing programs offered by retailers include rates that can skyrocket if you are late on a single payment and clauses where you may still be responsible for interest calculated during the "no interest" period.
* Look into credit repair services - For people who need additional assistance addressing their bad credit, another excellent resource for consumers are professional credit repair services. Professionals can provide their valuable expertise on important matters like disputing the questionable negative listings on your credit report and specific steps you can take to make the most of your credit score.