Improving and Maintaining Credit Score |
By Lacy Gallagher on July 25, 2011
.jpg.aspx?width=75&height=75) Maintaining a good credit score is important because the score is the way lenders, such as banks and credit card companies, to decide the risk associated with lending money to individuals. A few blips with a negative impact on your credit score do not mean that your credit has been permanently destroyed. There are certain steps that can be performed immediately to help improve a low credit score:
- Check your credit score. It is important to assure that your credit report does not have errors. You may request a free copy of your report, so be aware that websites such as freecreditreport.com are not completely free.
- Setup payment reminders. Making payments on time is one of the most important influencers of the credit score. There are services that offer email or SMS text reminders of when your payment is due as well as a great deal of companies that allow for automatic payments debited from your bank account.
- Reduce the amount of debt you owe. First, you must stop using your credit cards and accumulating more debt. Next use your credit report to make a list of all unpaid accounts and retrieve the up-to-date balances and interest rates on these accounts. From there, devise a payment plan that allows the most available cash to go towards paying off the accounts with the higher interest rates first.
Once your credit score is on the incline again there are steps to continue the climb upward:
- Get current and stay current on bill payments.
- Keep balances low.
- Pay off debt rather than moving it around.
- Only use credit when necessary.
Note: If you cannot keep up with credit card payments, you may need to protect your credit rating by completing a debt management program.
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