10 Ways To Improve Your Credit Score

It’s a new year and 2010 is the best market for buying a home in years, maybe decades. If you are thinking of looking for a new or used house, think about your credit scores first. They must be very good, preferably above 620, in order to get a mortgage in today’s market. Wondering how to improve your credit score? This article is for you.

Ten tips to improve your credit rating

Pay your bills on time. This may seem obvious, but making your payments on time, even if the minimum payment is all you can afford, goes a long way in improving those scores.
Don’t close unused credit card accounts. When you close a credit card account, records on previous transactions are lost, which lowers your credit score.
Don’t open credit card accounts you don’t need. Those special offers are not always worth it if you are just going to run your cards up and incur debt you can’t pay off.

Live within your means. Don’t buy more expensive items because you can charge them. Don’t charge items that will take months to pay off unless they are a necessity and there is no other way to finance them. Debt has a big effect on your credit score.
Keep track of your credit report. Use free credit report sites such as AnnualCreditReport.com. For more on this site, go to Free Annual Credit Report. Check the three major credit companies once a year, but stagger the inquiries to keep track of it over time.
Get overdraft protection. Everyone makes a miscalculation once in a while, and overdraft protection from your bank can keep those mistakes from going on a credit report.
Shop around for the best rate on a credit card. Find a card with a good rate before you apply for it. Many people do not realize that if you have decent credit, you can negotiate down your interest rate.
Avoid multiple credit inquiries. Too many inquiries over a short period of time can adversely affect your credit. Inquiries include those from buying a car, a house, or applying for credit, so try to spread them out.
Look into store credit cards if you are just getting started. Most store cards are fairly easy for someone with limited credit, such as a student or young person, to get. They usually limit you to purchases at that store only, so you don’t have so much temptation while building your credit.
Keep a consistent employment record. If you switch jobs every few months, it looks bad to a potential lender, regardless of what your credit score actually is.

For more information, check out What is a credit score and 10 things to know for a good credit rating score.