Smart tricks to improve your credit score

The three digit number called credit score plays a significant role in your life. From buying a home to getting a job, your credit score can play a vital part in some very important things in your life. So do you have severe credit blemishes? Stop worrying because you have plenty of company. A large number of Americans have credit scores poor enough to get them disqualified for getting loans with reasonable terms. However, you can definitely improve your credit score. Wondering how? Just read on.

What you should do:

• Your credit score is calculated on the basis of your credit reports. But your credit reports are certainly not error proof. So get copies of your credit report and check whether everything is all right. You can visit http://www.annualcreditreport.com for the said purpose.

• If the amount you owe is close to the credit limit then your credit score is likely to be affected. Your scores should be limited to 30% or less of the cards limit. You must understand that even if you make full monthly payments, your credit score can suffer if you rake up big balances.

• If you are a good customer then your creditor might agree to remove one or two negative items from your credit history. Things are tough if you have a more troubled account. However if make a series of timely payments for a long then your lender may agree to erase previous delinquencies.

• If your credit score is going down because of your outstanding debts then better try to pay off your debts as soon as possible. If your debts are too overwhelming then you can take the help of a non-profit credit counseling to work out a debt consolidation plan.

• If you have just cleared off your debts then you can apply for a new credit card to build a decent credit history. If you are denied a regular credit card then you can get secured credit card. If used judiciously it can help you to develop a good credit history.

What you should not do:

• Avoid making late payments. They have a negative impact on your credit score. It is a funny thing that late payments have greater impact on bad scores than good ones. If you have multiple negative items on your credit report then one more will not hurt it significantly. But if you are trying to fix a bad credit score then better stay away from late fees.

• Never ever ask your creditor to lower your credit limit. It reduces the gap between your balances and gap between your balances and the credit limit. This can certainly hurt your credit report. Sometimes, while applying for a loan your creditor asks you to lower the balance and you are compelled to do so. But make sure that you don’t do it unasked.

• Debt consolidation can have negative impact your credit score. It is always better to have small balances on few cards and than a big balance on one card.

• If possible stay away from debt reduction programs like debt settlement. Bankruptcy of course ruins your credit report and seems to stay on your report forever. It should be your last resort.

So keep in mind the above points and start building your credit score from today!