Nowadays, credit scores are more important than ever. After the financial crisis that hit the world, lenders have become more cautious and guarded. Many lending companies have increased their credit scores requirement. For example, to get the best mortgage rates, most lenders have increased their credit score requirement from 720 to 740. Thus, it is essential to have a high credit score. This may come in handy when applying for insurances, getting a new apartment or getting accepted to your prospect job.

Before planning on getting on track, here are the things that you need to get a good score. First of all, your finances shouldn’t be on a downhill slope. You must first fix your finances before you can fix your credit. You cannot pay off your debts if you still don’t have any money to pay off your bills. Hence, focus first on straightening things up before engaging on a grand plan. Second, you must have a credit card to get a good credit score. Your future credit usage will depend on your credit history. Even if you have money in your pockets, you cannot possibly obtain a good credit score because it is based on your credit and not your cash. When using credit cards, it doesn’t necessarily mean that you have to pay for interests for you to get a high credit score. If you pay your bills on time, you won’t have to worry of paying off interests. You also have to note that your credit score does not change overnight. You need at least 30 days to have a change in your score given that you will pay debts in your accounts. Most of the time, it will take years to repair your credit history especially if you have had bankruptcies and foreclosures in the past.

The best thing that you can do to improve and maintain your score is to check your credit reports done by credit bureaus such as Experian and Equifax. Errors in your entries can sometimes occur because these bureaus do not check the information being passed to them by lenders. Some of the things that might bring your credit score down are – accounts that are not yours, late payments even if you paid on time, and other old negative information that should have been eliminated already. Doing these things can help pull up your rating.

Another major thing that you should do is to apply for a major credit card such as MasterCard, Visa and Discovery. Your retail cards can help you improve your credit score but having a major one is a big plus. If you’re having a hard time getting one, you can apply for a secured version which can be converted to a regular credit card after some months. Just make sure to always pay your bills on time. You can arrange for an automatic payment system with your lenders to make sure that you get to pay on time. With this, a minimum amount that you set is deducted from your checking account for payment to your balances.

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Category: Finances
Keywords: credit score, improve credit score, tips on improving your credit scores, fix credit score