Tips For Increasing Your Credit Score
Pay Your Bills On Time and Communicate With Your Creditors If You Can't
One thing that really hurt most people's credit score is that they have been late (30+days) on payments. In this case, both the severity of the late payments (30 days, 60 days, 90 days, etc) as well as the timeframe are of concern. A credit card that is 90 days past due will hurt your score more than a credit card which is 30 days past due. If you have to choose between paying bills, try to ensure that your late payments stay to a minimum number of days. As far as the timeframe goes, the more recent the lateness, the more it impacts your credit score. The best thing you can do after being late is to pay on time. Over time, the impact on your score will lessen. If for some reason you are unable to make your payment, always contact the company and let them know of your situation- the best case is that they will give you extra time to pay without damaging your credit and at the least, you are no worse off than if you never made the call. Avoiding creditors will always be the worst thing to do, regardless of your ability to pay.
Keep A High Percentage of Available Credit On Your Accounts
The other factor which can hurt your credit score is the amount of available credit a consumer has on the total of their credit accounts. If you have very little available credit, this will have a negative impact on your score. Strangely enough, applying for new credit might actually help your score because if you are approved, it will increase the percentage of available credit to total credit on your accounts. NOTE: this is not necessarily the best solution for most people, but simply an option that has been known to help increase scores of individuals with solid credit histories and a disproportionately low amount of available credit.
Paying Your Accounts On Time Keeps Your Interest Rate Low
The bottom line for most people is that credit bureaus punish people for making payments late and using too much of their available credit, a scenario far too common in the United States today. Try to anticipate your monthly financial obligations and plan accordingly; even if you can only make the minimum payment, make it and make it on time. It may save you thousands in interest charges over the life of the account. Recent changes to federal law regarding credit cards has made it a little easier on consumers. Now a credit card issuer cannot raise your interest rate unless you are 60 days late on an account. In addition, if they do raise your rate, they must restore it back to its original level after you have made 6 months of payments on time. They can, however, increase your rate for any reason as long as they give you 45 days notice. If you can't make the payment, always call the credit card company before the payment is due- they may be able to provide an extension or set up a payment plan that can work with your current income. Either way, the worst thing to do is ignore the problem; it will not go away and most always will get worse.
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