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How to Increase Your Credit Score

With credit scores dropping like flies in the aftermath of the mortgage crisis, you may be asking yourself, “How can I improve my credit score?”

Good credit is absolutely essential to be able to finance big purchases such as homes, cars, appliances, etc. In addition, some employers and landlords will also check your credit as well.


While some may claim that the best way is to cut up your cards, this is not neccessarily the case. Better credit management can help improve your credit score a lot faster than cutting your cards can. Here are five tips to help you improve your credit:

  1. Pay your credit card bills on time! Pay as much as you are financially able to; the lower your balance the better.
  2. Get a credit card from a major issuer (Discover, Mastercard, Visa, American Express) ; store cards aren’t as effective in building credit.
  3. Spread your credit across multiple cards. Even if you are constantly paying off your entire balance, lenders take into consideration what % of your credit balance you are using. Try to keep your balances below 30% of your total available balances.
  4. You must use your credit in order to build it. If you have 5 credit cards but you’ve cut them all, your score won’t increase. Lenders want to see that you are not a risky borrower, but in order to do that they need to see your credit history.
  5. Try as hard as you can to avoid letting billing disputes go to collections!

Your credit score will not go up immediately – it will take a long time to rebuild credit, especially if you’ve defaulted loans or had a home foreclosed. But building your credit is a long term investment and that’s why it’s all the more important to start today.

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