How to Improve your Credit Score REAL FAST?

March 18, 2010

Author: William M. Davis

The race goes on to find ways of reducing debt and increasing our credit scores. This illusive feeling of being debt free has grown to be big business and financial professionals now charge individuals to give them advice of how to increase their credit score. Here we will break this mold and divulge some of the secrets that we hope will help in improving your credit score.

• Pay down the Credit Cards: An effort to pay down your credit card gives an indication that you are willing to manage your debt. Although you may not clear your credit card debts, it does wonders to your credit score. Lenders are happy to see a huge gap between the amount of credit you use and your credit limit. A good ball-park figure is to maintain your credit balance below 30% of the credit limit. Therefore, while some analyst will suggest getting rid of the credit card with the highest interest rate, surveys of credit card lenders say if you want an accelerated increase in your credit score, it is best to pay down the credit cards that are closest to their credit limits.

• Regulate your Credit Card Use: The rate at which you use your credit card affect you credit score significantly. Making emergency withdrawals from ATM machine and frequent shopping send the credit score through the roof. Even if you pay off your balance in full each month, the credit score is calculated the balance of the last reported or your last statement. Now we are not saying that paying off your credit card monthly, actually, that is a great positive practice. However, by regulating your credit card use helps to improve your credit score real fast.
• Use Old Card Every Now and Again: Even though we may stop using old credit cards, it is not wise to cancel them totally. Every six months or so use them to prevent your creditor from putting it on the list of dormant accounts. Have a credit card over an extended period show a huge amount of stability in the credit card system. As a result, this record is fed into the general system when calculating your credit score and improves your credit score exponentially.
• Increase your limit: A word of caution here. If increasing your credit will trigger you to go on a spending spree, then this one is not for you. This is for individuals who have a lid on things and are managing the use of their credit card. Increasing your credit limit actually gives you more room between your outstanding balance and the principal. Now, for this to work, you must maintain your credit balance below the 30% of principal mark and then just enjoy watching your credit score flying through the roof.
• Do not ruin a good thing: It is said if something is not broken, then do not fix it. If you already have a good credit score and good management of your credit card spending, then this is enough to give you a high credit rating. Continue implementing you control mechanism and do not play around with new ideas that may get you into problems.