Credit cards are not just little pieces of plastic used to buy goods. Every time a person uses a credit card, information is collected by credit reporting agencies pertaining to the number of accounts the person has, any outstanding balances and the person's personal income. This information is broken down into a three-digit credit rating that ranges from 300 to 850. The higher the score, the more availability the person has in attaining loans from lending companies and increasing credit balances.
Evaluate Credit Reports
Get familiar with your credit report. Any errors can negatively impact your ability to get loans and other types of credit. Everyone is entitled to receive one copy of their credit reports every 12 months. A request can be sent to the three credit reporting agencies (Equifax, Experian, and TransUnion). Additional copies are available for a fee.
Credit Card Responsibility
Use your credit cards responsibly. Check your credit limit periodically to see if the credit card company has a fluctuating amount for the maximum amount available to you. Such an fluctuating limit can mistakenly show up in credit information as a maxed-out credit card even though that is not the case. Another way to increasing your credit rating involves keeping a rein on credit purchases. Even if you pay on time and in full for all your purchases, credit information that shows numerous spending sprees can hurt a credit rating since credit reporting agencies record balances at the end of each month and high balances can indicate irresponsible spending.
Bill Paying
Pay bills on time. Missed and late payments will negatively impact your rating. Keep enough money in your accounts to avoid overdraft fees and schedule automatic payments with companies. Consistent payment of bills shows lenders that the person has a reliable credit history and will be able to make payments if approved for loans.
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