5 Simple Secrets that Can Fix Your Credit Rating

Your credit score is one of the most important factors in your financial life. If you need to fix your credit rating, try these simple steps to get started. 

1. Pay Bills on Time

Up to 35% of your score is determined by your payment history. That is a very large number. When you consistently pay your bills late, your credit score is adversely affected by it. Get in the habit of paying your bills on time and your score will shoot up much faster. Try to set up auto pay for your monthly bills and set aside two days out of the week to organize and review your financial picture. You do not have to set aside more than one hour, you just have to be consistent so that it does not becoming overwhelming.

2. Pay Off Balances

Most consumers carry a large amount of debt on credit cards and revolving accounts. Most estimates say that the average is somewhere around $8000. If you want your credit score to increase, try paying off the balances on your accounts. Even if you cannot pay them off entirely, it is better to try and make some progress. If you can get the balances down to about 30% of the limit, the credit bureaus will look at you more favorably and increase your scores. The closer the balance is to the high balance credit limit, the lower your credit score, so try to pay your balances down.

3. Look at Your Limits

Knowing your overall credit limit can help you in determining what to do. Some credit cards do not report your spending limit to the credit bureaus. Therefore, all they see is that you have $3000 on your credit card. They automatically assume that this is your limit and think that you are maxing out your credit every month. Either ask your credit cards to report your limit to the bureaus or lower your balance below what you normally keep it at. 

4. Use an Older Account

One of the criteria in your credit score is the length of credit history that you have. Therefore, the oldest creditor that you have is the one that you should try and do business with. If you have moved onto a newer and better deal, try to make a small purchase on your old card every few months. Don't break the bank, but simply make a small purchase and then pay it off. This allows the credit bureaus to know that you are still in good standing with your original credit issuers. Many times credit cards that are sitting dormant will not be reported to the credit bureaus. Therefore, it can actually have an adverse affect on you if you do not use them periodically. 

5. Ask For Help

When dealing with a credit card company, it never hurts to ask for a little help. For example, if you have had a late payment or two, ask them to erase it from your record. If you have since gotten your act together, they are likely to do exactly that. The worst that could happen is they say no and you remain in the situation that you are in now. You will probably have to put it in writing and determine what would help you the most. Credit card companies want to do everything they can to keep you happy.

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