| Because of the way credit scores are calculated, | | | | with a crisis such as a divorce, unemployment, or |
| some actions you take will affect your credit score | | | | sudden illness. |
| better than others. In general, paying your bills on time | | | | Lenders (and credit bureaus who calculate your credit |
| and meeting your financial responsibilities will boost your | | | | score) know that the more debt you have the greater |
| score the most. Owing a reasonable amount of | | | | problems you will have in case you do run into a life |
| money and being able to repay it will show lenders | | | | crisis. |
| that you take your finances seriously and pose little | | | | In order to have a great credit score, avoid taking out |
| threat of lost money. There are a few tips that, | | | | excessive credit. You should stick to one or two |
| more than any other, will boost your credit score the | | | | credit cards and one or two other major debts (car |
| most: | | | | loan, mortgage) in order to have the best credit |
| Pay your bills on time. | | | | rating. Do not apply for every new credit line or |
| One of the best ways to improve your credit score is | | | | credit card "just in case." Borrow only when you |
| simply to pay your bills on time. This is absurdly | | | | need it and make sure to make payments on your |
| simple but it works very well, because nothing shows | | | | debts on time. |
| lenders that you take debts seriously as much as a | | | | You should also know that taking out lots of new |
| history of paying promptly. Every lender wants to be | | | | credit accounts in a relatively short period of time will |
| paid in full and on time. | | | | cause your credit score to nosedive because it will |
| If you pay all your bills on time then the odds are good | | | | look as though you are being financially irresponsible. |
| that you will make the payments on a new debt on | | | | Pay Down Your Debts |
| time, too, and that is certainly something every lender | | | | If you have a lot of debt, your credit score will suffer. |
| wants to see. Experts think that up to 35% of your | | | | Paying down your debts to a minimum will help elevate |
| credit score is based on your paying of bills on time, so | | | | your credit score. For example, if you have a $1000 |
| this simple step is one of the easiest ways to boost | | | | limit on your credit card and you regularly carry a |
| your credit score. | | | | balance of $900, you will be a less attractive credit risk |
| Paying your bills on time also ensures that you don't | | | | to lenders than someone who has the same credit |
| get hit with late fees and other financial penalties that | | | | card but carries a smaller balance of $100 or so. If |
| make paying your bills off harder. Paying your bills in a | | | | you are serious about improving your credit score, then |
| timely way makes it easier to keep making payments | | | | start with the largest debt you have and start paying it |
| on time. | | | | down so that you are using a less large percentage of |
| Of course, if you have had problems making your | | | | your credit total. |
| payments on time in the past, your current credit score | | | | In general, try to make sure that you use no more than |
| will reflect this. It will take a number of months of | | | | 50% of your credit. That means that if your credit |
| repaying your bills on time to improve your credit score | | | | card has a limit of $5000, make sure that you pay it |
| again, but the effort will be well worth it when your | | | | down to at least $2500 and work at carrying no larger |
| credit risk rating rebounds! | | | | balance. If possible, reduce the debt even more. If |
| Avoid excessive credit. | | | | you can pay off your credit card in full each month, |
| If you have many lines of credit or several huge debts, | | | | that is even better. What counts here is what |
| you make a worse credit risk because you are close | | | | percentage of your total credit limit you are using - the |
| to "overextending your credit." This simply means | | | | lower the better. |
| that you may be taking on more credit than you can | | | | Have a range of credit types. |
| comfortably pay off. Even if you are making | | | | The types of credit you have are a factor in |
| payments regularly now on existing bills, lenders know | | | | calculating your credit score. In general, lenders like to |
| that you will have a harder time paying off your bills if | | | | see that you are able to handle a range of credit |
| your debt load grows too much. | | | | types well. Having some form of personal credit - |
| The higher your debts the greater your monthly debt | | | | such as credit cards - and some larger types of credit |
| payments and so the higher the risk that you will | | | | - such as a mortgage or auto loan - and paying them |
| eventually be able to repay your debts. Plus, | | | | off regularly is better than having only one type of |
| statistical studies have shown that those with high debt | | | | credit. |
| loads have the hardest time financially when faced | | | | |