What can I do to improve my credit score?

helpful tips What can I do to improve my credit score?If you apply and are denied credit due to a low credit score, you have the legal right to be told by your creditor exactly why you were denied. Reasons for this could range from having too much outstanding debt, having too many open credit accounts to a balance that is too close to your credit limit.  You are also legally entitled to a free copy of your credit report from the credit-reporting agency that was used. Once you receive your credit report, take the time study it, find out what factors are weakening your credit and work to improve on them. Here are a few simple pointers:

1) Look for mistakes in your credit report. Getting rid of inaccurate information can sometimes improve your score dramatically.

2) Reduce the balances on credit cards to 75% or less of your available credit (25% is preferable).

3) Maintain your accounts for longer.  The ratio of your debt to credit limit is critical in calculating your credit score.  Closing old accounts only raises this ratio – which you don’t want to do. Some people have moved debt from several credit cards to one card and then closed the old accounts. Since creditors look at the debt-to-credit limit ratio this can have a bad affect on your credit score because you have the same amount of debt but less available credit. So don’t close old credit card accounts just because you’re not using them. Creditors also look at the average age of your accounts so, again, keep those old accounts.  If you want to raise your credit score, do NOT apply for any new credit cards or loans.