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How to Build Your Credit Score

A solid credit score can lead to lower interest rates, loan approvals, and even job opportunities. If your score is currently less than what you would like it to be, you can take measures to improve it. By understanding the basics of the system, you can start building your credit score today.

What Credit Score Is

The term "credit score" refers to the overall health of your finances. The Fair Isaac Corporation usually calculates this three-digit figure. Fair Isaac takes information from your credit report and punches the numbers through a series of calculations. Your payment history and the amount of outstanding debt you have are taken into consideration. The length of credit, new credit, and type of credit you have are also reviewed.

Before issuing credit, many lenders check your credit score. You may be accepted or denied based on your credit score. For this reason, it is important to maintain a good score. And doing so can be easy. Following are a number of steps you can take to help you build your credit score.

Make Payments on Time

By far the easiest and best way to build your credit score is to avoid late payments. By paying bills on time, you show lenders that you are reliable and consistent. If you have a hard time remembering when payments need to be made, try streamlining the due dates. Call your lenders and ask to have the due date changed to a certain day of the month. Set up all your bills to be due on the same date. You can also line up automatic payments. That way, the money is withdrawn from your checking account at the same time each month. Have reminders sent to your email or mailbox. Find a method that helps you pay on time, every time.

Pay Down your Debt

Paying off debts that you have is another way to build your credit score. Strive to use only 35% or less of your credit limit. So if you have two credit cards that each have a $5,000 limit, you have a total credit limit of $10,000. Aim to keep your total outstanding balances under $3,500. This will lower your credit risk, thereby raising your credit score.

Keep Accounts Open

If you have had a credit card for a long time and rarely use it, think twice before closing the account. If you have a solid history of on-time payments, it may be in your best interest to keep the account open. It will show lenders that you have a longer credit history.

Use your Credit Card Wisely

Building your credit score does not mean getting rid of your credit cards or not using them. But before you make a purchase, consider how you will pay it back. Look into what you can and cannot afford before swiping the plastic.

If you decide to open a new account, keep your shopping time limited to 14 days. Once you have the credit card, pay off your balances on a timely basis. This will improve your credit score over time.

These are just a few ways to build your credit score. Staying on top of your finances and managing them routinely will help your FICO numbers increase. Before you know it, you will have a high credit score.


To Apply For A Credit Card Today click the following link: http://www.credit-card-surplus.com . Ed Vegliante runs http://www.credit-card-surplus.com , a directory helping consumers to compare and apply for credit cards.

This article is free for republishing
Source: http://www.articlealley.com/article_202563_19.html

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