If you didn't know, your credit score is directly linked to the interest rate you ought to pay when you borrow money. The score ranges between 340-850, and a low score means a very low chance of getting your loan approved. The following are some few ways of raising your credit score. Firstly, determine your current score of your credit – this you can do by requesting the information from Fair Isaac Corporation (FICO). With the info at hand, start by cutting down on your expenses for the short time, and channel the money to paying off for credit card debts, starting with the one with the highest rate of interest.
Another thing to keep in mind is to avoid using your credit card to the limit, only stick to the 30% card limit or less. This also has a direct effect on your credit score, regardless of whether you are capable of paying the minimums. You may seek the help of a finance software program to assist you keep track of your expenses if you find it difficult to do so. At times, a low score may reflect on your monthly credit report, not because it is actually low, but because your lender put it low erroneously. It is therefore advisable to check regularly on your credit score and if you feel there is an error, call your lenders immediately and let them correct it.
If you possess more than two credit cards, you probably don't need all of them, pay off most of them and remain with the oldest two. Keep the oldest as most credit bureaus look at that as the foundation of your credit score. Note that you need not to be using the card on a regular basis, as long as they are still active. Human is to err and if you have erred once by paying your minimums late, talk to your lender in getting that out of your record.
Late payments, charge offs, reported low credit limits, paid derogatory, accounts listed as paid as agreed, and those listed as unpaid, negatives and collections that weren't yours initially and negative things that have taken place over the credit period are the things that determine your credit score.
Raising your credit score doesn't happen immediately thus you have to monitor your credit limits, remit your minimums on time and ensure all your outstanding loans have been paid.