If you are getting ready to apply for a new loan or credit card in the coming months, consider whether there is anything you can do to increase your credit score. Having a good credit score can secure a lower interest rate and save you thousands of dollars over the life of a loan.
Timing
About 35 percent of your credit score is based on making timely payments to all of your credit accounts. Set up automatic payments from your bank account to ensure that you never miss a payment.
Amount of Debt
Decrease the amount of debt owed on revolving lines of credit such as credit cards to increase your credit score. The ratio of your amount of outstanding debt to your total amount of available credit contributes to about 30 percent of your credit score. Keep unused credit cards and large credit lines to help decrease the ratio of your debt to credit.
Warning
It is your responsibility to ensure that all the information on your credit report is accurate. Get a copy of your credit report every year and review it for errors such as accounts that do not belong to you and accounts reported as having late payments when you have paid on time. Follow the instructions that come with the credit report to fix any errors you find.
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