By David
Having a good credit score generally makes things a lot easier, but a decent amount of folks do not realize that until it is too late. Many make numerous mistakes during their first few years of financial independence — having a bit too much fun with credit card debit cards — and they are often shocked when they find out just how much harder life is for those who have been deemed untrustworthy by the credit bureaus.
Fortunately, even for those with extremely low credit scores, there are a few things that can be done to boost your standing with the credit bureaus:
Take care of delinquent accounts
A good way to let the credit bureaus know that you plan to start taking your financial obligations seriously is by dealing with all the negative accounts on your report. Reach out to the lenders you have used in the past, and try to work out a repayment plan. In some cases, when the past due accounts have already been charged off, you might even be able to settle the account by paying a lot less than the initial balance owed.
Maintain current accounts properly
When trying to build up your credit score, it is important that you keep all your current lines of credit in good standing. That includes credit card debit cards, as the former reports your activities to the credit bureaus, while the latter — which doesn’t usually report to the credit agencies — will do just that in the event that your account becomes overdrawn, and the negative balance is not promptly paid. Therefore, avoid overdrafts on your debit cards, and try to pay the balance on your credit cards in full every month. With every payment made on time, your credit rating will start to move upwards.
Use only a small portion of your credit line
Having access to a large line of credit does not mean you should max it out. Credit bureaus do not look positively on those who consistently use a large portion of their available credit, and it can be a sign of financial irresponsibility. Therefore, try to avoid using more than 30 percent of your available credit at all times.
Stop applying for every credit card debit offer you see!
Some folks don’t seem to realize it, but applying for numerous credit lines during any particular period is detrimental to your credit score. It is often looked at as a sign you might be desperate for funds, which leads them to question the reliability of your income. If you are trying to build your credit score to buy a house, for example, try not to apply for any credit lines a few years before you plan to make the purchase (while maintaining good standing with your current lenders), as it will do wonders for your credit score.
Having poor credit can be really frustrating, but fortunately, there is hope for those who find themselves in that situation. By following the above tips, you should be able to improve your credit score.
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