Credit and debt counseling has become a booming business over the last few decades..
For many people, their most important dream is to own a home...
If you have amassed a rocky credit history and if you are burdened with a low credit score


How to Improve Your Credit Score

If you are trying to improve your credit score, it might mean somewhere along the way that you had some financial problems or just didn’t try to get any credit in the first place. Either way, there are steps you can take to improve your credit score.

Before you can be in a decent position to work to improve your credit score, it is important and necessary for you to have at least a basic understanding of what your credit score is all about.  Logically, you simply cannot improve something before you understand it and its importance in your life.

Understanding Your Credit Score

Your credit score is based on your credit report, and is a three-digit number based on previous loans, what kind of loans they were, if you have any bad debt, and any current loans you may have. This will give a lender an idea of whether they should give you credit or reject your application, and if they do give you the loan, how much interest you should pay. A bad credit rating can make loans and credit cards extremely expensive!


 


Deal with Mistakes in Your Credit Report

You should start off improving your credit score by notifying the credit bureaus of mistakes. You should do this once a year just as a matter of course so that you have time to fix things before the need for a loan or credit card comes up. Begin this step early—it can take weeks to months.

Work at Paying Off Your Existing Debt

Another thing you can do is just pay off some of your existing debt. If you have an outstanding loan or are carrying a credit card balance, skip some meals out and give up your daily iced mocha for a couple months. There will be many other places you can make cutbacks to pay down your loan. Do it and don’t look back. It will save you much money and improve your credit score.

Beware of Closing Out Accounts

Make sure you don’t close any accounts before you submit your loan application. This changes the ratio of your credit limit and balance. Also, don’t open any other accounts—there is a limit of how much credit you may have according to your income. Don’t exceed this.

Make All of Your Required Payments on Time

While all this is going on, be certain to make all payments on time. This is critical, and is one of the largest contributing factors of your credit score. If you have a spotty credit report, this is a very good way to show you are back on track.

Keep Checking Credit Reports on a Regular Basis

Also, remember to check reports from all three credit bureaus—Equifax, Experian, and TransUnion. They will all have somewhat different reports.