What is the best way to improve my credit score? This is the question often asked by someone who is deep in dept. Credit scores is important specially if you are applying for a new credit card or a bank loan.

What are credit scores? This is a question asked by someone who is unfamiliar as to what a credit score is. It may be someone who also has no experience whatsoever in applying for a credit facility. Credit scores are ratings given by financial and lending institutions to individuals who they deem as credit risks. They base these scores on credit history of that individual. These scores usually range from 300 to 800. The higher the scores mean that that person is of good credit standing. It would be easy for that person to have their loan applications approved with lesser interest rates. Scores of 700 to 800 make these possible. That is the reason why there is a need to improve your credit scores.

What is the best way to improve my credit score? That is the question you ask yourself again. Most financial advisers give the following simple advices. It would be practical to take a look at them. Who knows? You might need a bank loan or a new credit card in the future.

Financial guru’s advices:

Pay your bills on time! By paying your financial obligations in their full amount and right on the due date is one of the best ways to increase your credit scores. Procrastinating on your bill payments will do more harm than good. Creditors impose penalty fees and give you a bad record on your credit report. You will end up spending more amount of money paying your bills if you fail to pay on time.

Make a good financial plan! The reason why people find themselves deeper in debt is that they fail to budget their money wisely. Financial advisers make a run down on all your assets and sources of income against expenses. By making a clear cut list of everything you have and everything you have to pay for gives you a clearer picture of your financial standing. The simple equation doesn’t stop there. If you are working on limited income you have to devise a plan wherein you will be able to pay for all your bills and loans and still have some money left over for savings. Rule of thumb is to immediately set aside at least 20% of all your earnings for savings and emergency funds. The rest of your budget should be allotted to all your other expenses. Manage your money in such a way that you will still live comfortably and your debts are being paid little by little.

Refrain from getting additional loans! Getting additional credit when you haven’t settled your existing loans will only result to a bigger financial loss. Do you really need a new credit card just because you maxed out your existing one? If you can manage to pay two credit cards every month then do so. Otherwise, financial experts will advice you pay off your existing credit cards first before getting a new one.

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Category: Finances
Keywords: credit score, improve credit score, boost credit scores, credit score advice