Tips to Improve Your Credit Score

A number of factors affect your credit score; improving the score requires you to take care of those factors such that you can manage your credit better.

Follow these simple steps to improve your score:

Improve your payment history:

• Avoid making late payments on your bills.
• Clear up all your past-due bills as soon as possible.
• Request your creditor for an alternative plan with low monthly payments.
• Negotiate with your creditors to remove charge-offs from your report and re-open those accounts.
• Request your creditors to erase late payment entries after you re-start paying in time.

Reduce your outstanding debts:

• Pay off high interest debts first.
• Keep your balances low and try to keep your revolving debt to 50% of your available credit.
• Don't close old and unused accounts rapidly in order to lower your available credit. It will raise your debt-to-credit limit which has a negative impact on your score.
• Try to close accounts gradually over several months. Verify if the accounts closed are reported as "closed by consumer".

Improve Your Credit History:

You should not open several new accounts within a short period of time when your credit history is less than at least three years. Adding too many accounts in a short interval implies that you are not able to manage your credit properly.

Manage new credit efficiently:

• Restrict yourself to a medium credit limit and not a higher one as your creditor suggests.
• Do not try to open too many new accounts if you have gone through credit problems in the past.
• Plan your budget taking into account your finances and credit.
• Avoid several credit inquiries within a short period; otherwise it would mean that you are about to open multiple new accounts and this will affect your score.

Use a proper mix of credit:

• It is better not to have too many installment loans as they can reduce your score. This is because the payments remain unchanged until you pay off the balances.
• You can have a combination of credit cards and installment loans or loans with fixed payments as they help in improving your score. But you need to handle your credit cards efficiently.

Visit my website's Mortgage Center for more helpful credit information.