How To Build A Perfect Credit Score
Good credit history is not just essential for obtaining a loan or applying for a credit card
. Finding a decent home to rent, a stable job, or obtaining an insurance policy with reasonable rates often depends on the quality of one's credit score.If a prospective landlord, employer, or insurer looks into your credit report, will he find an impressive rating? Will you be turned down because of your credit score? If you feel that your present credit score is not at its best, consider these eight ways on how you can build a killer credit score that will never let you down.
1. Examine your credit report. Obtain a copy of your credit report and see what impression it makes on your prospective lenders, employers, landlords or insurers. Are all the information in your credit report accurate?
If there are mistakes, make sure you notify the credit bureaus right away and ask that these errors be corrected. Nevertheless, if all details are right, ask yourself which part of your credit history has a room for improvement?
2. Open a savings account. Banks don't require your credit report when opening a savings account. Although checking and savings accounts are not reflected in your credit report, lenders also use bank accounts as a way to determine one's credit worthiness.
3. Be on time when paying your bills all the time. If you want to establish credit history and maintain good standing, there's no substitute for paying your debts on time at all times. Lenders love clients who take on their payment responsibilities seriously. Be aware of you due dates and be consistent in submitting your payments promptly.
4. Do not maximize your credit limit. The ideal credit usage should be 30% and no more than half of your allotted credit. Be careful not to overuse your low interest credit card and max out on your credit line. Even if you're saving a great deal by paying a reasonable interest rate, you can be hurting your credit score badly if you max out your credit limit on that one particular credit card.
5. Pay your credit card balance in full each month. Carrying a balance will not help your credit score. On the contrary, paying balances in full in each billing cycle will save you from the risk of accumulating debts, incurring interest rates, maximizing your credit line and penalty fees.
6. Get a secured credit card. One way to improve a damaged credit is to apply for a secured credit card that reports to the credit bureaus. By keeping with your payments on time and watching your credit usage, you will be improving your credit significantly in just a few months. Always take the option to ask your bank for an upgrade of your secured credit card to a good credit credit card after having consistent payments.
7. Pay all your creditors on time. Don't just focus on one creditor. Make sure that you are being a good payer to all of your creditors. If one of your credit card applies the "universal default clause", other creditors can increase your rates if you missed a single payment on your credit card.
8. Don't borrow more than what you can afford to pay back. Remember, every credit you borrow entitles you to a serious responsibility. So before you go charging a purchase on that credit card, think ten times if it's really worth the purchase and if you have the means to pay it back on time.
Copyright (c) 2009 Suzy Vanstrusen
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