Your credit score has a very large impact on many aspects of your life. It can affect your ability to get a car, personal, or house loan. It can also affect the interest rate that you would pay for any of these loans. It is very important that your credit be as high as possible.
1. The first step to improving your credit score is to request a copy of your credit reports. Make sure to request a report from each of the three major credit reporting agencies. You can do this for free once per year. It is important to look at a recent copy of your credit report to determine if any errors have been reported against you.
2. Report any errors that you find to the credit reporting agency. These errors can include late payments that were not late, accounts that are not yours, and credit limits that are reported as lower than the actual limit. This should be in the form of a written letter. If you have proof that the information reported is not factual, this should be mailed along with the letter.
3. Pay down credit card balances. Lending institutions look at how much credit you have used compared to the amount available to you. Most companies recommend that people who use credit cards never charge more than half of their credit limit. This shows lenders that you have restraint and that you do not overextend yourself in terms of credit.
4. Pay your bills on time, every time. Late payments can cause large drops in your credit score, so it is important to avoid them at all costs. If possible, try to set up automatic withdrawals from your bank account so that your payments will never be late. Making your payments on time is one of the best ways to quickly improve your credit score.