Easy Ways to Improve Your Credit Score

Your credit score is a very important number. It will almost completely dictate your finances. If you are looking for ways in which to improve your credit score, then you should know that there are 2 really easy things that you should do.

Request More Credit

Eventually there will come a time when you will need to request more credit. You can either ask your current creditors for more credit or open a new account that doesn't have any annual fees attached to it. Of course, you are not going to want to run out and make a lot of new charges on this credit card. Instead, you will simply want to use it to give your ratio of debt-to-credit a boost.

The way in which this works is that if you carry a credit card with a $1,000 limit and you have $496 in debt, your debt-to-credit ratio will be approximately .5. You will want to see that this number gets lowered though. By opening four new credit card accounts with $1,000 credit lines on each of them and maintaining a $1 balance on each of them, you will be able to lower your debt-to-credit ratio to .2.

Pay Attention To Inquiries

It is important to understand that there are essentially two different types of credit inquiries. The first type is a "soft credit inquiry." This will have absolutely no affect upon your credit rating. These inquiries are usually done whenever you look at your own credit report or another minor request is made. The second type is a "hard credit inquiry." This type of an inquiry can hurt your credit score. It is usually done whenever you apply for any new credit.

Usually you will be able to do one or two credit inquiries within a six-month period without harming your credit score. However, if you do any more than this, you will start to see your credit score decline. This is something that some of your potential creditors will take a look at. They will want to know just how many inquiries you have had within the past six to twelve months. If you have had more than two inquiries, it is quite possible that you will be denied credit.

Now that you understand this, you can clearly see how important it is to only apply for credit whenever you are rather certain that you will be approved. Of course, if you need credit for personal or credit building reasons, you can also apply for it then as well. You just don't want to haphazardly start applying for new credit is all.