Credit scores can have a huge effect on people's lives, allowing or denying them access to various forms of finance. Consumers often ask how to improve their credit score. There are three things that can help to boost your credit options.
- It's important to ask for a higher credit limit (as long as you don't plan on maxing it out). Credit scores use a "credit utilization ratio", which is the proportion of any debt you've taken out to the total limit of credit you're allowed. For example, someone with $1,000 on a credit card that has a $10,000 limit will have a ratio of 10 percent. The lower the ratio, the better, so increasing limits can lower ratios and help to improve your credit rating.
- Reviewing your credit score is vital, and then ask for positive reports to be added. Your credit score is based on your historic use of credit, with your amount of debt, how much you've paid back, and your management of personal finance taken into account. Things often get left out, so request that missing details that may have a positive impact on your score, such as timely payments, are included.
- Request that any negative information that might be damaging to your credit score be removed from your report. If an otherwise positive credit history shows a single late payment, for example, it is possible to have this removed, especially if you can show that it is out of character for you. Offer the credit reporter proof of any extenuating circumstances that caused it, such as an illness or the death of a loved one.
People often think that they have little control over their actual credit scores. There are ways to improve these reports, helping consumers to access the credit they need. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips.