Friday, May 9, 2014, AM | Leave Comment
Given the current sluggish economic conditions, many people have been struggling to maintain their financial state. However, for those looking to strengthen their conditions, one of the most expedient ways is to improve your credit score. This is easier than most people think by following a few simple steps.
Whether you are looking to enhance your credit standing to receive better terms on a mortgage or are just getting back on your feet because of financial hardship, bolstering your credit score goes a long way on your journey to financial freedom.
Eliminate Old Debt
This is far easier said than done, but eliminating old debt is a sure fire way to get your credit score back on track. Start off by stop using your credit cards because they can get you into trouble if you don’t have them under control. Once your debt-to-credit ratio exceeds 10 percent, your FICO score begins to fall. As a relatively simple step of improving your credit score, paying down old debt, namely credit card liabilities, can be done by being thrifty with your expenses.
Be Careful When Making Debt Payments
Though it may be a relief to pay off a student loan or car note, debtors should pay off credit card debt before these items, as this has more impact on your FICO score. In fact, many debtors are surprised that paying off a car loan entirely has little impact on their credit rating versus paying off old credit card debt. Sometimes you may need to the help of professionals like those at Thompson and DeVeny Co., L.P.A. to help you manage your debt.
Convert Credit Card Liabilities to a Personal Loan
Given the benefits of a traditional loan over credit card debt in terms of improving your FICO score, those in debt should try to change roll their credit card balances into a single payment with a personal loan. Doing this has the potential to augment a FICO rating by at least 100 points.
Request a Credit Report
Often credit reports contain errors that consumers don’t realize. By rectifying these mistakes, people can improve their credit rating instantly and thereby receive more competitive interest rates. Consumers may receive a copy of their report at no charge once per calendar year online from each of the three major credit bureaus.
The worst mistake to hurt your credit score is to skip a payment on your debt. After 30 days, the lending institution may report this missed payment to a credit bureau, which may remain on a consumer’s credit report for seven years. In every case, one must make at least the minimum monthly payment to maintain a good credit standing.
Improving your credit score is easier than you think but it takes time. It can be done by being disciplined with your finances and following these simple steps. Within no time you’ll see your FICO rise providing you with the financial wherewithal to realize a life of wealth and freedom.
Meghan Belnap is a freelance writer who enjoys spending time with her family. She also enjoys being in the outdoors and exploring new opportunities whenever they arise as well as researching new topics to expand her horizons. You can often find her buried in a good book or out looking for an adventure.