How to Boost Your Credit

Your credit score provides a quick overview of your ability to handle credit responsibly. Lenders look at your credit score before approving you for car loans, home loans, phone contracts and apartment leases. Sometimes, employers will check your credit; a bad credit score not only costs you money through higher interest rates, it can also restrict your career opportunities. Boosting your credit score is the easiest way to save money on interest rates.

Instructions

Simple Steps

1

Obtain a copy of your credit report; free credit reports are available through AnnualCreditReport. Under the Fair and Accurate Credit Transactions Act of 2003, consumers are entitled to one free credit report annually from each of the national credit bureaus-Experian, Equifax and TransUnion. You may choose to request all three reports at once, this is ideal for comparison, or space them out for updated information throughout the year.

2

Check your credit report for errors. Disputes must be filed with one of the credit reporting agencies. Disputes are more likely to remove errors if they are accompanied by documentation; if documentation is unavailable, it is still best to file a dispute since creditors must verify their claim.

3

Pay bills on time. Companies report to one or all three credit reporting agencies; the longer your account is paid on time, the higher your score will be. Also, a late payment has a lower negative impact than a missed payment. A single missed payment can decrease your score by thirty to seventy points.

4

Pay off or lower account balances. Higher amounts on "revolving credit," such as credit cards, imply to creditors that you may be living beyond your means.

5

Shorten the time frame when rate shopping for car or home loans. Multiple inquiries within a shorter amount of time reflects as rate shopping; longer periods of time between loan applications have a negative impact.

6

Be added onto someone else's credit account. If you know people with excellent credit scores, you can boost your credit if they add you under the "add a card holder" section of credit card accounts. Their credit score is now added to your credit profile. Convincing others to trust you with their credit account might be difficult if you have poor credit; a tactic to convince them to help you is to ask them to add you to their account but never give you the card or any of the account information.