Improve Your Credit Score in 5 Simple Steps

Improving your credit score can be simple if you know what steps to follow. If you have poor credit, bad credit, or simply want to improve your credit score, there are specific steps you can take to make it happen. Your credit score is computed mainly using:

* your payment history
* type of credit you have
* length of your credit history
* your outstanding balances
* new credit you’ve established

Each of these items is weighted differently, but tweaking all of them can play a role in increasing your credit score. If you can take these five steps you should see your credit score increase.

1. Make payments on time and pay down your balances.

The biggest contributor to your credit score is your payment history. This means that if you do nothing else, you have to make your payments on time. Find a payment system that works for you and make sure your payments are received on or before the due dates.

It also helps to pay down the balances of your outstanding debt. This doesn’t mean paying off the debt completely. It’s about your ability to manage your debt, so making payments that reduce your outstanding balances also raises your credit score.

2. Leave your credit accounts open.

The longer your relationships with creditors or lenders, the better off your credit score is. Do not fall into the trap of closing unused accounts or completely paying off credit and loan accounts thinking it will increase your credit score. Leave your credit accounts open, if you don’t use them.

The longer your credit relationships are, the higher your credit score. It’s important to note that you also have to have a good relationship–a good payment history–combined with the longevity of your relationship with the creditor. Read the entire article.