How to Raise Your Credit Score

Being responsible with credit doesn't always mean that you'll be rewarded with a high credit score. But there are a few tricks that you can use to help raise your score. Having a high score can mean the difference in getting approved or being denied credit. If you're approved, it can also determine if you'll have a high or a low APR.

The first step is to know what's on your credit report and obtain your credit score. There isn't much point in trying to affect something if you don't know what it is. You need to request a copy of your credit report from all of the credit bureaus. You'll quickly discover that everything isn't always listed on all of the reports.

Always pay your bills on time so your credit rating isn't affected. Paying your bills late, even just one payment, may be reported and affect your credit report from seven to ten years.

If you have derogatory items on your credit report that you feel are unwarranted, you can report any inaccuracies to the credit bureau so they can be investigated. Any accurate items will, of course, not be removed. If you pay them off, they'll still be on your credit report but at least they will be marked as paid.

If your credit reports are accurate and don't have derogatory items, but your credit score is low, all hope isn't lost.

One way to raise your credit score is to pay off some of your debt. However, if someone could afford that then they probably wouldn't have debt to begin with. One variation of this that looks really good is paying more than the minimum due. This tactic may also increase your credit limit on your credit cards.

Another strategy is to do balance transfers. By moving around your debt periodically (maybe once a year), it looks as if you're paying it off. On the same note, someone could take out an unsecured loan to pay off debt. Both of these options will also save money because the balance transfers or loan will probably have a lower APR.

Even if you pay off your credit cards monthly, keep your balances within approximately fifty percent of the credit limit. Having a high balance to credit limit ratio doesn't look good at all. On the other side of that, canceling cards that you do not use doesn't look good either. Keeping them open looks favorably on you especially if you've had them for a while.

Lastly, be careful of applying for credit too often. Inquiries tend to stay on your credit report for two years. And every time you apply for credit, it also lowers your score.