February 21, 2009
1. Pay your bills on time. This could be the single best way way to put yourself on the road to a good credit score. Also, not paying is the easiest way to ruin a credit score.
2. Maintain a low balances. You should try to keep your balances below 30% to 40% of your credit limit
3. Open new accounts only if you need them. If you are think that adding a new account will be favorable for your credit score, you probably shouldn’t. This usually has on effect and it is not proven to give a boost in your credit score
4. Have a credit card – There are many debt gurus that abdicate not to have any credit cards. In regards to getting a good credit score, you must have a credit card or two. Without these you will represent a much higher credit risk to lenders. You just need to be responsible with these lines of credit.
5. Closing Accounts will not take them off your credit report. Closed accounts will stay on your credit report. Furthermore, your payment history to that account will be taken into account when determining your credit score.
6. Shop around for a mortgage or car loan, Don’t shop for a credit card. The credit score formula differentiates shopping for a loan or shopping for ten new credit cards. So you are allowed to shop for a mortgage, but each new credit card will count as an individual inquiry.
7. Don’t open new accounts to get a good initial rate. These new accounts are going to lower you credit score. This makes the in store initial discount not worth it and they should be avoided.
8. Don’t open a lot of new accounts at once. If you have a short or long credit history you should not try to get a lot of new credit fast. This will lower your credit score.
9. Check your Credit report for Errors. Bankrate.com states that 70% of credit reports have errors on them. Dispute errors this could give you an initial boost.
10. Don’t lower your credit limits. If you are not using the credit great, but don’t lower your limits. This will hurt your utilization.
11. Don’t close old accounts. This will not only lower your utilization but could hurt your credit history. Keep the old accounts and use them from time to time to ensure your account doesn’t close it.
12. If you having trouble paying your bills contact your creditors. If you are having trouble making payment, you should call your creditors and try to make any arrangement. This will protect your credit score if you can come to agreement and give you some breathing room.
13. Get current! If you have a missed payment you must do anything you can to pay it and get current. This will prevent additional late fees and reduce its severity.
14. Protect your identity. Check you credit report for identity theft this has been on the rise and can wreck a good credit score. Either pay for credit monitoring service or credit your 3 in 1 credit report every 6 months.
15. Be wary of balances transfers. If you do use balance transfers to consolidation your credit card debt, don’t think you can start spending again. Pay it off. The majority of people add this debt back and then some.