| We all know how important these scores are. After all | | | | determiner of how well you do when you go to |
| this number is what's used by your prospective lender | | | | borrow more money. Borrowing must be carefully |
| to decide whether or not you'll get credit, and what the | | | | controlled to prevent too much outstanding debt. If |
| terms are going to be. Lower numbers mean fewer | | | | you're in a situation where you have borrowed a lot in |
| loans and higher interest rates. That causes many of | | | | the past - stop asking for more. Work toward reducing |
| us to ask: "How can I improve my credit score?" Let's | | | | the balance instead - it may not be easy, but it's the |
| take a look at the options in front of us to determine | | | | only thing you can do if you want your situation to |
| how to improve your numbers effectively. There are | | | | improve. Timely payments and balance reduction are |
| plenty of pieces of advice given that don't do the job. | | | | important. |
| Here are some that will. | | | | How Much Do You Use? |
| How Credit Scores Work | | | | You'll want to think about how much credit you have |
| Scores are made up of five basic parts. Thirty-five | | | | available and how much you use. If your cards are |
| percent is determined by payment history, thirty | | | | maxed out or close to being so, your rating is going to |
| percent by how much you owe, and fifteen percent | | | | go down. It's much better to maintain two cards with a |
| by how long you have had credit. New borrowing is | | | | high limit and relatively low balance than to put that |
| another ten percent, and what kinds of credit you use | | | | same balance on one card, even though you have |
| make up the last ten percent. That means that the | | | | borrowed the same amount. This may seem strange, |
| best thing you can do to improve your financial | | | | but it will affect the way your numbers are calculated |
| situation is to make payments on time. | | | | in the end. |
| This will keep your numbers high and help you improve | | | | Keep Old Accounts |
| them, too. The single biggest factor used to determine | | | | How long you have had your history is also important |
| your FICO is payment history, after all. Remember that | | | | when it comes to your FICO. That means that if you |
| if you allow your bills to be more than a month over | | | | want to improve things, you should consider maintaining |
| due, they will show up on the report and you'll get a | | | | all old accounts that are still in good standing. Keep |
| negative mark on your history. These black marks | | | | things manageable, but make sure you have a good, |
| stay there for seven years! | | | | reliable history to fall back on. Be careful opening new |
| Controlling Debt | | | | accounts, so it doesn't look like you're frequently trying |
| If you want your credit score to improve, you're going | | | | to borrow. Never have an account you're not going to |
| to need to pay attention to what you owe. The | | | | use, and your credit score will do a lot better. |
| amount of debt you're carrying is the second biggest | | | | |