Increasing your credit is a good thing to do, especially if your credit score is less than stellar. A good credit score can open up a lot of opportunities for you. Plus, if you want to have money for things in the future, whether you need an emergency personal loan or it’s time to get a second mortgage on your house, you need to make sure your credit looks good to the banks and credit unions that are going to loan you money.

If you have bad credit it isn’t the end of the world. You can do things to boost your credit, it just takes time and money. Here are some things you can do to help increase your credit.

Know Your Score

The first step in bettering your credit is to know your score. You can do this through a website, like Credit Karma, or you can get a credit card that keeps an eye on your score for you (both Credit One and Capital One do this for you, and have cards available for people with bad credit).

Speaking of, getting a credit card can be a good way to help boost your credit. The key is to pay it off each time you use it. Don’t max it and don’t simply make the minimum payments.

Pay Off Your Bills

Keeping your bills paid off and out of collections is an excellent way to boost your credit. You don’t have to pay them all off right away, but ensuring minimums are paid on time every month can make a huge difference. The moment you start missing payments is the moment when things are going to slowly start going downhill.

You should also continually be paying your bills on time. Don’t pay any of them late, even your trash bill. It’s just a good habit to get into.

Available Credit

When you have increased available credit (such as the money available to you through your credit cards) it can increase your credit score. It shows that you have money, you don’t just owe money to everyone. There is always a good balance to have between what is available and what you already owe.

Watch Where You Apply

If you apply for a bunch of loans and credit cards all at one time you are going to seriously affect your credit score and in a bad way. Credit card inquiries can stay on your report for up to two years. And when you get declined it can really look negative on your report.

So, it makes sense to only try for a credit card once in awhile and to make sure that you are certain you have a chance of getting accepted. Do a little research on the company and what they look for in a person’s credit before you apply.

Photo Source: Flickr by CafeCredit under CC 2.0



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