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Simple Steps to Raise Your Credit Score

raiseThere are several ways to raise your credit score,  and if you implement some of these simple tips, you can watch your score go from average to good rather quickly.  Not everything on your credit report weighs equally on your score.  Having a good score on your credit report can save you thousands of dollars in interest rates over the course of your life, so if want to raise your credit score, follow these easy rules.

2 Most Important Ways to Raise your Credit Score

When you are looking to raise your credit score, there are two factors that weigh most heavily.  The first factor is payment history, in other words, the way you pay back your creditors.  Did you know that even one late payment can cost you over 50 points on your credit score?  If you are a person who frequently forgets to pay your bill on time, you may want to opt in to auto pay and have at least your minimum payment automatically draft from your bank account each month.  This tip alone can save you from losing costly points each and every month.   The second largest factor that affects your credit score is credit utilization ratio.  For example, if you have a credit card with a $5000 limit, you should never carry a balance of over $500.  Rule of thumb should be never use over 10% of your available credit per account, per month.

Several Other Factors that can Raise your Credit Score

There are many other ways you can raise your credit score that many people aren’t generally aware of.   For instance, never eliminate your oldest credit card account.  People make the mistake of closing older accounts and when they begin shopping for a loan, they find out that lenders take length of account history into heavy consideration.  This history tells a story of how you treat your accounts over a longer period of time and long history equals better credit scores.  Another mistake people make is opening too many new accounts in a short period of time.  When you open a new account, your name gets sold, and you will begin to receive other offers in the mail.  Don’t make the mistake of taking on too many new accounts at a time, it makes lenders question your motives, and makes you look risky.  Lastly, you should make a practice of checking your credit report at least once a year to be sure there are no mistakes, and that everything is being reported properly.  It is not difficult to raise your credit score, and it will be worth it in the long run.

To your Success~ :Lori