Ways to Improve Your Credit Rating
By: Nick Cox | Posted: 24th January 2008
Having a less than perfect credit score can damage your chances of qualifying for credit. But, there are things that you can do to improve your current credit rating.
The following tips can potentially improve your credit score. However, don't expect to see an immediate improvement as it can take up to three months to see any changes.
Make paying your mortgage and car loans a priority
Large debts, such as mortgages and car loans contribute greatly to your credit score. Failing to pay either of these debts on time can negatively contribute to your credit rating. Likewise, making payments for large debts consistently on time will have a positive effect on your credit rating.
The key to a good credit rating is prompt payment of bills. The whole purpose of a credit rating system is to evaluate a person's financial reliability. Paying debts promptly and consistently will ensure your credit score remains healthy.
Get a credit card
Credit cards may be seen by many as a cause for more debt; however, using a credit card and then clearing the balance at the end of the month is one of the quickest ways of improving a credit rating.
Reduce your credit card balance
Having credit cards that are close to maxed out doesn't reflect well on your credit score. It is therefore recommended that you keep your balance at around 25% of your credit card limit.
Check for credit score mistakes
It's a good idea to check the accuracy of your credit score with all three credit bureaus (Experian, Equifax and Callcredit plc) before applying for loans. Mistakes can take months to rectify, so check that your credit score is correct well in advance of applying for credit.
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Tags: priority, credit cards, three months, accuracy, mortgage, credit rating, credit score, equifax, credit bureaus, mortgages, car loans, credit card balance, credit card credit, credit card limit, paying debts