Your credit score can drastically affect the amount of interest you pay on any loan or card. The following tips will help you protect and improve your rating as well as clear bad marks.
- Order your credit report at least once each year. Your score is based on your report, so it is important to review each of your three reports from Experian, Equifax, and TransUnion for any errors or fraudulent activity.
- Check your report for any inaccuracies or outright errors. Be certain that old negative accounts and paid-off debts (more than seven years old) are deleted from your history. Your payment history makes up more than a third of your score.
- Try to always pay your bills on time. Your payment history makes up more than a third of your score
- Work to keep your card balances low. Carrying smaller balances and paying on them regularly go a long way to keep your credit score high. In part, your credit score measures how much of your limit on each card you are currently using and how much of your combined limits and balances is taken up by purchases.
- Try to avoid opening in-store cards. Although having your first accounts can help serve to build and improve your history, there is a point at which each additional application reduces your score. New cards reduce the average age of your credit history and a department store card account isn’t good evidence of credit worthiness.
- Be conservative when applying for a line of finance. Having at least one card that’s more than two years old can help raise your score by 15 percent or more. Keep in mind that as potential creditors determine your worthiness they will request a copy of your report.
- Don’t close cards or other revolving accounts. Doing so can decrease your overall score.