Would you like to raise your credit score? The first thing you should do is to check your credit report and make sure that there are no negative remarks which can be damaging your rating. If you find erroneous details, you quickly fix these glitches by sending a letter to the bureau that send you your report.
After making sure that your report is free from errors and that there are no derogatory remarks, you are ready to boost your credit score. Consider the following steps which can help you build credit:
Consider a secured credit card. If you don’t have a credit card yet or can’t qualify for a regular credit card because of a low score, you can get a secured credit card instead. Approval for a secured card is not based on credit history or credit score so you should be able to get approved right away.
However, be prepared to submit a security deposit which can be anywhere from $200 to $500, depending on the issuer. This deposit will serve as a security for your debts. In case you fall behind your payments, your issuer will tap into the security deposit to pay for any unpaid balance.
Use your secured card regularly. To build credit, you need to show that you are capable of managing debt and credit. Prove this by using your secured credit card regularly for payment. To avoid the risk of debt build-up, use your card only for a small amount of purchase. By keeping your charges minimal, you can be sure to stay within your credit limit and that you will not have a hard time paying off your balance.
Pay all bills on time. It’s not just your credit card bills you should pay on time. It’s also important to pay all your creditors promptly if you want to boost your credit score. This includes loans (such as car loans, personal loans, student loans, etc) and utility services (electricity, cable, internet, etc).
Are you currently in the middle of mortgage repayment? If yes, then you need to be very conscious about submitting your monthly mortgage loan payments on time. Don’t forget that delaying with your home loan payments will not only affect your credit score. You can also end up losing your property to your lender once a foreclosure is filed against you.
Do not send out too many credit applications. If you want to apply for a credit card, spend time doing research and compare deals before submitting your application. Don’t try your luck by sending out applications to different issuers at once. Doing so can badly hurt your credit as each hard inquiry will deduct a few points from your score.
The same principle applies when applying for a loan. You should compare offers from at least three different lending companies but you should never submit loan applications at one. Furthermore, consider waiting until your credit rating has improved before applying for new credit to qualify for lower interest rates and better deals.
About the Author
Tara Tiemann is the credit specialist for http://www.go-prepaid.com. Which is a resource site for people who want to live debt free! If you are on a budget, using a secured credit card and merchandise credit cards can save you big money!
