A credit score is a unique number that indicates how credit-worthy you are. This number indicates your probability of paying back debt. It is generated from your credit history. To do this, lenders use your social security number to retrieve your credit record from the database. Once they get it, they can compute a credit score for you. This number has three digits and ranges from 300 to 850. The higher your score is, the more trustworthy you are. People with a high credit score are more likely to receive loans and other types of lending from institutions such as banks. Knowing the previous fact, and if you're into investments, you should definitely want to increase as much as possible your credit score. To help you with that, here are 10 different ways to do this.

Pay Your Credit Card Bill on Time

This is the most obvious strategy to improve your credit score. However, it is one of the most important ones. Payments that have been made late are a major negative characteristic that reduces you credit score. When they show up in your credit reports, late payments discourage lenders from providing you with any credit finance. The impact made by late payments lasts for up to seven years in your credit score. Therefore, ensure that you pay at least the minimum required amount of your credit card bill every month. One way of ensuring that you are able to repay back your credit card bill is to make intelligent purchasing decisions with your credit card. Only spend what you can afford to pay back.

Ensure That Your Credit Card Balance Is Low

The balance in your credit card is considered in the calculation of your credit score. This balance is the money that you have left to spend in your credit card. If the available balance is more than 35% of the limit on your card, it can cause you to have a low credit card score. For example, if your credit card has a limit of $1,000, then you should have a balance of less than $350 in your card. Moreover, you should always make payments on the card that are timely and above the minimum amount required per month.

A Good History Is Always a Good Thing, So Maintain Favorable Accounts

A factor that is considered when the credit score is being calculated is the period of time that you have had credit card accounts with your creditors. If you have a positive history that is long-term with a creditor then you are rewarded. This is even if the account is currently not being used. Therefore, if you have some credit card accounts with a good history but are no longer in use, do not close them. Simply keep the cards safely. These accounts are very beneficial when calculating your credit score.

Apply for Credit Only When You Need to and Also Check for the Best Rates

Apply for new credit cards only if it is absolutely necessary. The more credit cards you have, the more you are tempted to use them and increase the risk of developing bad credit. There are many temptations to apply for a new credit card. For example, when you are buying electronics or appliances, the retailer will offer you a substantial discount and great financing if you open a credit card account with them. This is always a tempting offer. However, you do not need to apply for a new credit card if you already have some that are functional. Limit your exposure to bad credit scores and you will maintain a good one.

Check the Credit Report That You Have

The first step to fixing your credit record is to get a credit report. This one is accessible for free once a year. Once you get the report, analyze it for errors. This report normally contains the information that is used to calculate your credit score. In some cases, it could have errors. Some of the errors to check for are false late payments and correct owed amounts for your credit cards. Should you find any errors in your credit report, consult the bureau and have them corrected. After that, you will have an accurate credit report to work with.

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