Credit Material » How To Raise Your Credit Score

How To Raise Your Credit Score

Posted on September 6, 2009

A credit score, together with credit history, determines whether you are eligible for a loan or not. If you successfully maintain a high credit score, you’ll be allowed to have the best credit cards, the lowest interest rates, and you won’t face any difficulty while finding financing for large purchases such as auto loans or home mortgages.

raise credit score

Most of the people are always worried about their credit score, and are constantly looking for ways to increase their score. Although it’s not really important to have a perfect score, or a credit score over 800, it is important to maintain a good score for several reasons.

But the question is that how do you raise your credit score and maintain it? There are many practical and simple ways to attain a high credit score. But you have to work hard in order to achieve your goal.

Pay on Time

In order to achieve a high credit score, you should pay all your bills on time. Late payment are not allowed, if you want to raise your score. Try to make your payments on time and see your credit score rise.

Increase your Available Credit

Although most people don’t know about this, but you can also raise your credit score by increasing your available credit limits. You can ask your creditor to increase your credit limit, while spending the same amount. This will leave quite some credit unused and will give a good impression.

The more available credit you have, the higher your credit score will be. Any bank or creditor would be more willing to lend to someone with more room to spend than someone who is nearly maxed out on their existing cards.

But do remember that credit limits can’t be increased until you have been using your card for at least 6 months, and your credit score may temporarily drop as a result of the new credit request, so don’t try this if you’re attempting to raise your credit score in a short period of time.

Pay Down Debt

By paying off your debt, you can increase your score. Try to keep your debts low, but your credit cards open and active. By increasing your available credit, you become trustworthy for creditors.

Closing your credit card accounts might cause your credit score to drop as lesser credit limit will then be available to you. So always keep credit cards open and active, when you are trying to increase the score.

It Takes Time

Credit score alone is not enough for you to become eligible for any kind of loan. Credit depth and history play an equally important role. In order to build credit history, you have to keep your cards open for a long period of time, whereas multiple cards or loans provide depth.

In order to build a good credit score, you have to follow the above mentioned steps diligently and with patience until you are able to succeed. You should also view your credit report, from time to time to find any mistakes and if you do, report them to the credit bureaus immediately. An error on the credit report can also harm your score.