Thursday, September 19, 2013

Credit Card Score - How to Improve Yours

Your credit card score is an important rating and affects your credibility when you want to apply for a loan. So if you have a credit card, and have missed a couple of payments, it is probably time to get to work on your credit score.

Here are some simple tips to help you improve your score:

    • Find out your credit score: The first step towards improving your score is to find out what it is. You can check with your credit card company and ask them to provide a transcript. You can even ask for an annual free copy from your local credit bureau. This will give you a baseline and will tell you where to start. If your credit score is less than 620, you should begin with your efforts.


    • Piggyback on someone with a high credit score: If someone in your family has a high credit score, you can ask them to add you as an authorized user on their credit card. When they have a strong credit history, you will automatically start reaping the benefits. This could also be an opportunity to learn from them about healthy credit practices.


    • Keep records: Studies have shown that almost 79% of credit history reports have some errors. This means it is likely that yours could have errors too. So maintain a history of all the payments you have made. If you have defaulted anywhere, make a note for comparison later on. This can help you correct any faults, should any occur.


    • Automate your payments: Most people have their credit scores destroyed when they get late on their payments. This is considered a default. So to avoid making late payments, you could automate them. Leave standing instructions with your banking account to pay your bills on a set date every month. Most bank accounts let you do that, so automating the payments should not be a complicated task.


    • Pay several times a month: If you are among those who use their credit cards rigorously and charge the card close to its limit often, your credit score is bound to go down. The solution for this is to pay off your credit card bills in small installments. As soon as you think you may reach the upper limit, quickly make some payment so that you do not cross it. You can make the full payment at a later, more convenient date. Try to at least pay the minimum amount due as soon as possible.


  • Concentrate on the card that's closer to its limit: This way to improve credit card score is only for those who have several credit cards with them. In such cases, you should first pay off the bills of the cards that are closer to their limits. However, this does not mean that you can ignore the cards that are not close to their limits. You should be paying off all your bills, if you want to improve your credit card score. Missing out on a single payment could bump your score way down.

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