If You Don’t Know How To Improve Your Credit Score

Isn’t it so easy to dig yourself into a whole?  The sad part is, it is easy to do the digging, but you have to change your method to get yourself out.  Simply doing the same thing over and over expecting different results is actually close to the definition of the word “insanity”.  So, why do so many of us try the same old strategies and lifestyles when our credit is in a bind?  It is important to know the right ways on how to improve your credit score.  You have to keep yourself updated on this topic, because regulations and procedures on the subject change on a quarterly basis.  Also, not all those changes help you, the end consumer.

 

The Difficult Truth

 

Have you ever heard when you were young that you should get a department store credit card and use it “every once in a while” if you want to establish credit for yourself?  I’m sure you listened to the advice, because who doesn’t want free money?

Especially at that age, that sure is a lovely sounding piece of advice.

Unfortunately, this is one bit of advice that we should not have listened to, because fifteen bucks a month suddenly became, “I can’t afford my payments anymore.”

The sad part is that credit reporting agencies aren’t even looking at these cards anymore as real lines of credit.

The crazy part is that credit reporting agencies don’t even regard “good credit behavior” on these cards as a plus, but if you are not controlling spending and missing payments, it is a mark against you.  Sadly, you would have been better off just getting yourself on a low credit limit plan from a major credit card company.

 

The Best Ways To Go

 

If you want to know how to improve your credit score, then you should follow these steps closely:

 

• First, save up $1,000 and put into a savings account, in a safe, or under your mattress.  Keep that money and sit on it for an emergency.  Hint: a sudden need for a Jaguar is not an emergency.
• Next, how to improve your credit score is to pay off the least amount credit card first, and do the same with each card.  This will give you “momentum” and motivation to keep up the good work.
• Next, pay off car loans and credit card debt, getting yourself to a point where you have no “high-liability debt”.
• Once you’ve done this, you will find it much easier to keep up with your mortgage payments, and if you pay these on time, your score will automatically improve.  This is a great way how to improve your credit score.

 

Of course, there is no tried and true system to improving a credit score, but a lack of toxic debt sure is a great way to go.  When you have less debt, you won’t have to worry about other payments, and it will lighten the load on your income.

The best way to improve your credit score is to get out from under your credit card, car loan, and student loan debt.  These are like anchors that will drag you to the bottom.

Posted by: on Feb 21 2012 | No Comments