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How To Improve Your Credit Score

May 13, 2008
If you are have been in serious debt problems or filed for bankruptcy in the past then you will probably have seen your credit score go down. This article will discuss how to improve your credit score. The article will pinpoint some of the reasons why a low credit score can hold you back and give you 4 things to do to increase your credit score.

It is fairly common knowledge that a low credit score can make your life more difficult. Anyone with a credit score below 650 may struggle to get a loan or credit. If they do get a deal then it is almost certain that the interest rate payment that they get on the credit will be higher than someone with a better credit score. A poor credit score may also make it harder to rent property or get a job. Thus it is important to increase your credit score. It can make your life far more straightforward.

Your credit score is calculated based on your past financial details. All these details are recorded in your credit history. Thus your past determines how people will treat you in the present and future. The first step to improving your credit score is to ensure that the credit history that people have on you is correct.

You can check that your financial past is correct by viewing your credit history. You can get a free report on your credit history from the three credit agencies. You want to check that you have not been a victim of identity theft, that the details in the history are wrong and that information that is no longer valid has been removed from the report. If any information is wrong then you can contact the agencies and ask them to correct the information.

Establish that your credit history is correct and legitimate. Ask the agencies to change anything that is wrong or out of date. when you are happy with the credit history, you can start working on the credit present and future.

Above all you need to get into the positive with any kind of debt. Most important is any personal bank accounts that are in the red. You should work hard to pay off any overdrafts in a personal bank account. Set some money aside each month to cover this expense. Look into creating a budget so that you can have more control over the money you spend.

With any personal debts cleared you want to set up a plan to keep your bank account in the black. Develop a simple savings plan, such that even a small amount of your monthly income is deposited and the balance moves up. If you have been paying off debt then keep on paying this debt into the bank account as a savings plan.

Use credit sparingly. Have one credit card rather than many. Use the card prudently. Never exceed the credit limit and pay off the the balance each month. Pay off all monthly bills on time too.

You need to prove that you can manage your finances capably. This proof should last over a year and become a lifetime habit. Indeed, it is more important that you develop good financial management skills rather than use some quick trick that will raise your credit score for a short period of time. Ultimately a credit score is a way that other people view you not a definition of who you are. Good financial sense will be a way to get ahead and stay ahead now and in the future.
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