How to Improve My Credit Score

In today's economic environment, you may be pondering "how to improve my credit scores". What most people do not realize is that increasing your credit score by 80 points can reduce the interest rate that you pay by 1.5%. This could potentially save you hundreds of thousands of dollars over the course of a 30-year mortgage.

Instructions

1

Pay Your Bills On Time - Everyone knows that you should pay you bills on time each month. What you may not realize is that every late payment shows up as a negative factor on you credit report. As soon as you get your invoice, rip it open, mark it on your calendar, and pay it BEFORE the due date.

2

Pay More than the Minimum Due - Most minimum payments are around 4% of the outstanding balance. Paying this amount really contributes to you having less wealth. Basically you are working hard to earn some money only to send it to the credit card companies at the end of the month. Do whatever you need to do to make some extra money. eBay, even with their ridiculous fees, is an easy way to reduce the clutter around your house and pay off some debt.

3

Do Not Skip A Payment - I think this is worth repeating - DO NOT SKIP PAYMENTS! If my goal is to increase my credit score and to become debt free, allowing the credit card companies to tack on interest and penalties is not the appropriate approach. Pay anything that you can each month, even if it is less than the minimum. Do not allow your accounts to be sold to a collection agency.

4

Do Not Close Old Accounts - One of the major factors in determining your credit score is how long you have had credit with each creditor. If your balance is zero, leave it open (unless there is an annual fee). Simply cut the card up to ensure that you never use it again.

5

Lower Your Outstanding Balances - You credit score is negatively impacted if you carry a balance that is more than 35% of your available credit. For example, if your available credit for Card 1 is $1000, you should not carry a balance greater than $350.