Home

How To Get A Great Credit Score


Getting a great credit score takes work. You must make a financial plan and stick to it. Being irresponsible with your credit will not only lower your credit score, but may also prevent you from being able to obtain new credit, land a better job, or even obtain a new insurance policy or rent that perfect apartment. Your credit score tells lenders, landlords and other professionals how responsible you are, how likely you will be to pay your accounts and whether or not you are a potential fraud risk. The good news is that there are number of ways you can ensure that you have a great credit score.

1.      Don’t make late payments or miss payments altogether. The number one reason that many people have poor credit scores is that they have numerous late or missed payments on their credit files. Your payment history makes up over ½ of your credit score.
2.      Don’t overapply for credit. Every time you want to open a new account, apply for a job, apartment, or other product that requires a credit check, an inquiry is placed on your credit file. Every inquiry negatively impacts your credit score. The more inquiries you have, the lower your score will be. Of course, the impact is temporary and comparison shopping is always a good idea, but try to keep the number of inquires to your report as low as possible.
3.      Don’t max out your credit cards. Even though you pay your accounts on time every month and you don’t go over your limits, maintaining high balances on your credit cards and other open accounts will actually lower your credit score. Many organizations will shy away from individuals with high balances because it may be an indication of irresponsible money management or an issue with income.
4.      Don’t close paid accounts. By closing accounts you are no longer using, you effectively reduce the amount of available credit you have, negatively impacting your debt to available credit ratio. For the same reason you shouldn’t max out your credit accounts, you should leave paid accounts open.
5.      Don’t neglect to pay other accounts. Just because an account is not reported to your credit file every month doesn’t mean that you shouldn’t pay it. Most creditors these days will turn delinquent accounts over to collections agencies, which will report the negative account to your credit file, lowering your score. Keep all of your accounts in good standing.
6.      Don’t open unnecessary accounts. While it is a good idea to have more credit available than you need, it is not wise to have a multitude of open credit accounts on your file either, even if you aren’t using them. This is because you present a higher risk of default if you run up the balances on all of your open accounts. Having too much available credit can be as detrimental as not having enough.

Bad credit scores can be improved to great credit scores over time by following the tips outlined in this article. It will take approximately two years for most negative items to stop having as great an impact on your score and up to seven years to be completely removed.

Video Feature