How to Get a Better Credit Score

One of the most important numbers in your life besides your social security number is your credit score. The higher the score the better your ability to get a loan for a house, school tuition, car or other purchase. Your credit score tells lenders about your financial history and your ability to pay back a loan. A good credit score also gets you lower interest rates. While you cannot improve your credit score overnight, you can improve it within a month a two.

Instructions

1

Pay bills on time. This shows financial responsibility. If you think you will be late with a bill, talk to your creditor and make payment arrangements. Also ask that the late payments not be reported to the credit agencies. If you are already late with a payment, try to pay as soon as you can or speak with the creditor to explain the situation. Don't ignore late bills. Let your creditor know you are aware that you are late. A creditor may be more willing to work with you.

2

Reduce credit card balances. When considering you for a loan, a lender looks at your credit limit and you balance. Try to keep you balance at 25 percent of your limit. Paying more than the minimum each month will lower your balance at a faster rate.

3

Get copies of your credit reports. Each year you are entitled to one free copy of your credit report from each of the three credit reporting agencies, TransUnion, Experian and Equifax. After you get the report, read it carefully. If you find mistakes, contact the agency using either form provided or by phone. Each agency must investigate any items in your report that you dispute. If the agency agrees that an error has been made, the dispute item will be removed from your credit report. If you do not agree with the agency's finding, you have a legal right to add a brief note to your credit file explaining why you believe the item is in error.

4

Don't try to get more credit. One thing that will lower your credit score is applying for new credits card or loans. Too many inquiries on your credit report send up red flags with creditors. If you expect to apply for a loan for a major purchase, it is best not to apply for new credit the six months leading up to your loan application.

5

Don't consolidate your debts. Pay off the balances on your loans or credit cards instead of consolidating them into one large loan. Your credit score will be lowered if you have the same amount owed but on fewer accounts. Lenders look at the ratio of balance to limit when determining if you are a get risk for a loan.