Learn how to manage your credit score and improve your
creditworthiness
Think of your credit score as a picture of your credit
risk. This picture reflects your risk at a specific point in time. A picture
does not change; however, when you take another one, you will probably look a
little different. Similarly, when your credit information changes, your score
will also change to reflect the updated information.
There are steps you can take to ensure that each time
a new “credit picture” is taken, it shows your best side. By
observing the following guidelines, you can influence your credit worthiness
for the better:
- Be punctual- Pay all your bills on time.
Late payments, collections, and bankruptcies have the greatest negative effect
on your credit score.
- Check your credit report regularly and take the
necessary steps to remove inaccuracies – Don’t let your credit health
suffer due to inaccurate information. If you find an inaccuracy on your credit
report contact the creditor associated with the account or the credit reporting
agencies to correct it immediately.
- Watch your debt – Keep your account balances
below 50% of your available credit. For instance, if you have a credit card
with a $1,000 limit, you should try to keep the balance owed below $500.
- Give yourself time – Time is one of the most
significant factors that can improve your credit score. Establish a long
history of paying your bills on time and using credit responsibly. You may also
want to keep the oldest account on your credit report open in order to lengthen
your period of active credit use.
- Avoid excessive inquiries – A large number of
inquiries occurred over a short period of time may be interpreted as a sign
that you are opening numerous credit accounts due to financial difficulties or
overextending yourself by taking on more debt than you can easily repay.
