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Your credit score affects many aspects of your financial life: the willingness of banks and lenders to offer you lines of credit, student loans, insurance rates, apartment rental, new jobs, and more. Credit repair might be necessary for some people who have been negligent in the past, but there are other ways to improve your score if you can avoid repair. The first step to improving your credit score is to find out what it is, which is available online for free every year. Equifax, Experian, and Transunion are the chief credit bureaus, and your score can differ from company to company– so you’ll want to check all three. Even if your credit is already good, you can still improve it with the following tips.
Improving Your Credit Score
First off, minimize your credit inquiries. Inquiries can cost you up to 50 points on your credit score– so don’t go overboard. Second, don’t close your existing credit accounts, because this reduces your line of credit and, thus, your score. Your credit history benefits from the availability of credit; your debt to credit availability ratio is widened by leaving open existing credit cards. Just because you’ve paid off a credit card doesn’t mean you should close the account. Lastly, distribute your debt evenly across several cards to improve your debt to credit availability ratio. Let’s say you have one credit card with a substantial amount of debt on it and several other cards with much lower balances: Spreading the debt from the first card over the others equally can raise your credit score. Changing your credit score takes time and patience, but it can be improved with some simple long-term decisions.
Credit Repair
So you don’t have that 700+ credit score that you’re looking for. Don’t despair. You can improve your score regardless of what it is– some people just have a lot more room for improvement than others. You can choose to repair your credit on your own (there are many resources available on the internet to help you get started), or you can get in touch with a credit repair agency if you don’t feel comfortable doing it alone. Either way, you’ll want to acquaint yourself with the regulations maintained by Federal Trade Commission (FTC). There are hundreds of companies specializing in credit repair that can help you out, but there are also plenty of scams aimed at the already vulnerable. Don’t let them kick you while you’re down. With time and effort you can improve your credit score and ensure that you’re getting the best rates on your investments.
Additional Resources
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