Tips To Improve Your Credit Score

First of all, obtain a copy of your credit report to see where you need to focus your efforts for improving your credit rating. You are entitled to one free copy each year after which you will be charged. However, you might be able to obtain your report at no charge if you meet certain criteria. Once you have the credit report, you will need to review it to determine the areas where you can improve your score.

It's important to first identify what your credit score is made up of. Here is a breakdown: 35% is based on your payment history; 30% is based on your balances, both secured and unsecured; 15% is based on your credit history; 10% is based on the types of credit you have; and 10% is based on your inquiries. It's important to realize that if you have a high credit score, in order to maintain it, you must not only pay your bills on time, but you must also limit your applications for new credit. However, if you are already having problems with your credit rating, you needn't worry as there are steps you can take to raise your credit score.

Go over your report in detail to determine areas to improve. One important step you can take in improving your score is increasing your total credit line. You can accomplish this by applying for a new processing account that reports to all three major credit bureaus. Your score will improve noticeably with an increase in your overall credit limit. Another step you can take is to pay down any credit cards you have to lower the amount of debt you have.

Remember that improving your credit score doesn't happen over night. Some experts say you might need to put in at least a year into repairing your credit before you can expect a significant improvement. However, there are steps you can take over time and by using a budget you can implement a plan to pay off your indebtedness.

One warning to avoid when trying to improve your credit rating is to be certain not to fall for any old get rich quick schemes or credit repair scams. Unfortunately, there are many companies out there who will claim that they will create an amazing new credit history for you. Do not fall for these programs because they will waste your time and money. A lot of these credit repair programs can be quite costly which is why they have been dwindling in popularity.