Having a high credit score has a number of advantages. In addition to qualifying you for lower interest rates on loans, high credit scores provide evidence of your financial responsibility to other parties, such as employers or landlords. Having a low score can be harmful, as it can lead to higher interest rates and potential problems finding a job or apartment. Fortunately, there are a number of different ways that you can hike your credit scores.
Paying Off Balances
The best credit repair strategy is to pay off as much debt as possible. Delinquent debts, as well as a large number of outstanding debts, will lead a credit reporting bureau to downgrade your credit rating. Keeping a balance of below 30 percent of the credit limit on any single credit card will help you keep your score high.
Keeping Credit Lines Open
When you are not using a credit card, you may be tempted to close the line of credit. However, unless you are paying an annual fee to use the card, this is generally not a good idea because your score is based in part on the ratio of your outstanding debt to your outstanding credit. If you eliminate some of your credit, this ratio will climb, leading to a lower score.
Don't Open Too Many New Accounts Too Quickly
According to the Fair Isaac Corporation, which developed many of the methods that credit reporting bureaus use to calculate scores, opening too many accounts too fast can result in a decline in your score. This is because your score is based in part on the average age of your accounts. If you open a lot of new accounts quickly, the average age will fall, as will your score.
Check Your Own Report
One of the best ways for you to maintain a strong credit score is to regularly check your own credit report to make sure that it does not contain any errors. Making sure that all the debts that you have paid off are indeed reported paid off will prevent you from seeing your score dinged by any charges that are not supposed to be on the report. If you notice an error, you should contact the credit reporting bureau.
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