One of the biggest assets you have in your financial portfolio is your Credit rating (or score). Your lending rates will be much lower if your credit score is high compared to a low credit score. The difference can be, literally, hundreds or thousands of dollars. You want to preserve a good credit score, but how do you do that? How do you uphold a good credit score, let alone repair your credit score?
You might be surprised to find that raising your score can be done in as little as a few months. Credit ratings are based on a couple of deciding factors; they are your current debt owed, your registered income, your repayment history, and any recent credit checks. Some of these may weigh more heavily than others. To raise or even repair your score, you'll want to use the steps provided below.
o Your registered income. This is what you earn from your current place of employment, whether it's a salary or an hourly wage. If the amount of the debt is greater than what you currently earn, then your credit score is lowered. Sometimes getting a part time job will allow for added income thus, showing extra effort on your part, and in the process, increase your credit rating.
o Paying off your credit cards. Take all your credit cards you make monthly payments on and pay them off. Most of us think we are paying our bills before the due date, when in fact, credit card companies report debt owed on a monthly basis, which is sometimes before the due date. This won't show as bad debt, it just decreases your credit rating. I would recommend that if you have one credit card, pay it before the end of the month, until the card is paid in full. If you have several credit cards, pay the minimum on all but one; for that one credit card, start paying more than the minimum until it's paid off.
o You are allowed one free credit report per calendar year from one of the three major bureaus. Check your credit score, and use that knowledge to assist you in determining what you need to do to increase or repair your credit history.
o Budget your money carefully by making sure you have an excess of money in your account for emergencies.
o Applying for several cards at once actually has a negative effect with the reporting credit bureaus, as they lower your score with each inquiry needed to check into your credit. Instead, open only one new account monthly, to be safe.
Credit monitoring services can help you keep up on your score, protecting you from bogus activity on your account. They inform you by email whenever activity is made on your account, and help you by offering assistance on raising your credit score for the future.