creditscore.jpgAs I have stressed the level of importance regarding your credit score in my previous posts, now I want to talk about how you can improve your credit score. We all know that credit is very important and useful to us in many ways. That little slip of plastic opens up a whole new world of possibilities and you want to make sure that credit is on your side. Here is a quick list of 5 things you can do to improve your credit score:

  1. Pay your bills on time. This is probably the most important of all the steps when trying to improve your credit score. Missing just one payment on a credit card or car loan can take 50 to 100 points off your credit score. And if you miss an entire month’s worth of payments, your score could easily drop 100 to 200 points.
  2. Don’t automatically close older accounts you have paid off.This way of thinking has been updated over the past few years. The rule of thumb had been to automatically close every account that had a zero balance to improve your score. Now the strategy is just the opposite. By closing your oldest accounts, you may actually be considered less creditworthy
  3. Try credit counseling. Legitimate credit counseling agencies, like InCharge Debt Solutions, a non-profit consumer organization, can help you improve your credit situation, which in turn can help improve you credit score.
  4. Avoid bankruptcy. The worse thing that can happen to your credit score is to declare bankruptcy. This can take off around 200-300(or more) points on your credit score!And declaring bankruptcy will typically stay on a credit report for a very long time, up to 10 years.
  5. Pay down your debts, and once you have paid them off, charge less in the future. Creditors expect a certain amount of room between the amount of debt on your credit cards and your total credit limits. The more debt you pay off, the wider that gap and the better your credit score.