How to Raise Your Credit Score
Raising your credit score has many benefits. Individuals with a high credit score get better credit access, lower rates, and favorable treatment while renting a flat, or even getting a job. We give you four useful tips that will teach you
how to raise your credit score.
Get Your Credit Report
To start with, first get your credit report. The web site AnnualCreditReport.com gives a free credit report annually. If you have been recently refused a loan, you can ask for a copy of your credit report. Review the report for accuracy and errors, if any. Sometimes, you may come across data that you have no knowledge about. If you do, you can dispute such data. You will also get an idea of the number of inquiries for your credit report.
Streamline Your Budget
Many people do not know how they spend their hard-earned money. But, those with high credit scores know their exact financial situation. Therefore, review your credit card statements to check where the money is going. You may find hidden fees and recurring charges that you have no knowledge about. Your credit card statement will also provide you information about your spending habits. With this info, you can start reducing unnecessary expenses, prioritize the debts to be paid off and even save some money for the rainy day.
Reduce Your Debt
Reducing your debt by paying on time will raise your credit score. When you pay off your debts, your available credit improves. Thus, if you are only using 10% of your credit line, your credit score will definitely improve. Spending over your credit limit negatively impacts your credit score. Besides, your issuer may also charge fees. Pay off your debt on time. The more consistent you are in paying off your debt on time, the higher your credit score will be.
Keep Your old Accounts Open
Your credit report could reveal that you are maintaining a few zero-balance accounts, that you forgot about. Do not close these accounts as it could reduce your available credit limit. Instead, start using these accounts. Do not use a single credit card for all your expenditures. Spread out the expense load across more accounts. Certain cards may suit certain expenses. For example, if you have a card that gives back 2% on restaurant dining, use it whenever you want to eat out.
Finally, do not apply for new accounts if you are not sure of approval. This is because requests for your credit report lower your credit score.