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Advice on How to Improve a Low Credit Score
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Stuart Hunter
Providing credit repair services since 1991, Lexington Law has helped over 500,000 clients legally take on their credit. Last year alone, Lexington Law helped clients remove over 600,000 negative items from their credit reports. 
By Stuart Hunter
Published on 08/20/2009
 
Each day, millions of adults across the U.S. contend with the effects of having <a href="http://www.lexingtonlaw.com/credit-education/bad-credit/"> bad credit</a>. Some are turned down for credit cards or vehicle loans, others find out their applications for mortgage refinancing have been rejected. If you're dealing with the limitations that can result from having poor credit, you may already know your credit score is in need of repair.
Advice on How to Raise a Low Credit Rating
Millions of people across the U.S. struggle with the effects of having poor credit. Some are turned down for credit cards or vehicle loans, others find out their applications for a new home loan have been rejected. If you're experiencing the limitations that can result from having poor credit, you may already realize that your credit is in need of repair. These days, getting information about what you can do to repair your credit score doesn't have to be frustrating or stressful, thanks the wealth of credit information and resources available to consumers.

The first step in improving your credit is learngin what is on your credit reports. You can do this by ordering your credit reports for free from www.AnnualCreditReport.com or by calling 1-877-322-8228. This service is provided by the three largest credit bureaus in the United States; Equifax, Experian, and TransUnion. The Fair Credit Reporting Act entitles you to receive, by request, a free copy of your credit report from each of the credit bureaus once every 12 months.

Tips to Improve Your Credit Score

Based on the information in your credit reports, credit scores are an important tool used by lenders to calculate the probability a consumer will repay a loan. Fortunately , this rating is not set in stone. It can take time, but there are things you may be able to do to improve your credit score.

* Pay your bills on time - Payment history makes up 35 percent of your credit score. A period of not making your payments on time can cause your score to drop but since the effect of a late payment wanes over time, focusing on making all payments on time going forward will move your credit score in the right direction.

* Try to keep low balances on your credit cards - Outstanding debt makes up 30 percent of your credit score. The closer you are to reaching the limit on your credit cards, the less stable your finances appear. Keeping credit card balances below 30 percent of the limit will make your credit utilization ratio look better which will be reflected positively in your credit score.

* Avoid rotating your debt on numerous credit cards - Transferring debts to a lower interest rate card is a good strategy when working to whittle down debt, but a history of transferring balances between credit cards looks like you are robbing Peter to pay Paul in lieu of of being able to make your monthly payments.

* Carefully study loan or credit offers before accepting them - Some loans, including retail store lines of credit, are loaded with fine print and other strings attached that can end up causing big problems down the road. For example, some no payment, no interest financing programs offered by retailers include interest rates that can skyrocket if you are late on a single payment and clauses where you may still be responsible for interest calculated during the "no interest" period.

* Use your credit cards responsibly - Keeping balances low is a start, but you should also be careful to keep the number of cards you have in check, make all payments on time, occasionally use older cards, etc. For the most part, best practices for all credit accounts apply to credit cards as well but given how frequently people let their credit card spending get out of control, responsibly using credit cards deserves special mention.

* Look into credit repair services - For people who need additional assistance addressing their bad credit, another excellent resource for consumers are professional credit repair services. Professionals can lend their valuable expertise on important matters like disputing the questionable negative listings on your credit report and specific steps you may be able to take to make the most of your credit.