Improving Your Credit Score

By Karen Lawson
CMR Columnist

It seems that everybody is interested in your credit score these days. Why? Lenders base their decisions for granting credit on your credit score. How you handle your debts can make the difference in getting the credit you need.

No Quick Fix for Bad Credit

You've probably been bombarded with offers for repairing bad credit, or quick fix schemes promising to remove all negative information from your credit report. Like all things that seem too good to be true, these claims won't help, as there is no legal way to remove information from your credit report unless you're disputing incorrect information. Here are some tips for improving your credit standing, but it will take time.

I Owe, I Owe: Reduce Debt Quickly

If you have credit card debt, installment loans, student loans, and car loans, welcome to the club. Americans are carrying record levels of consumer debt, and all of it shows on our credit reports! The more debt you have, the lower your credit score is likely to be. Here are some tips for reducing debt and improving your credit rating.
  • You are entitled to a free copy of your credit report annually. Request it and read it!
  • Make a list of your debts, their balances, and interest rates.
  • Pay off the highest interest rate debts first.
  • Try to pay more than the minimum due each month
  • Pay your bills on time. Late payments cost extra money and can reduce your credit score.
  • Avoid maxing out your credit cards.
  • If you own a home, a mortgage refinance or a home equity loan can be ways of eliminating high interest rate debt
  • Contact your creditors if you cannot pay them. Try to work out a repayment agreement.
  • If you are in serious financial trouble, contact a non-profit credit counseling agency for help. Their low cost service can help restructure your budget and make repayment arrangements with your creditors.
Taking control of your credit today can increase your credit resources in the future.

About the Author
Karen Lawson worked in the mortgage banking industry for more than fifteen years. She holds an MA degree in English from the University of Nevada, Reno, and now works as a freelance writer.

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