If you’ve taken the time to have a close look at your financial situation and determined that your credit score, while acceptable, isn’t quite where you’d like it to be, you might be wondering about ways you can go about improving it.
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It’s usually not that difficult to turn a fair credit score into a good one, but it does take some time and attention. If your credit score is fair, it’s usually because while you have some good habits overall, you may have made a few missteps here and there along the way, and it can be helpful to look closely at your old financial documents to determine exactly what they were.
For example, if you have missed just one due date on a credit card bill, even if it’s just by a single day, your score might have taken a significant hit that can take months of on-time payments to mitigate. But unfortunately, a series of on-time payments is the only way to repair the damage done by a missed deadline, so you’ll have to be conscientious in making up that mistake.
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Another reason many consumers have average credit scores instead of good ones is that they put too much on their credit cards. The amount of your total available credit limit that you use at any given time is the second-largest factor in determining your credit score, so if you’re carrying more debt than you should from one month to the next, your credit score will suffer. Fortunately, the obvious quick fix with this consideration is to simply start paying more into your outstanding balance every month so that your debt comes down more quickly. This will also have the added bonus of helping you to save money in the long-run. Experts recommend that you carry a maximum of 30 percent of your total balance if you want to max out this aspect of your score.
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Of course, you should also try avoiding opening new lines of credit if you want your score to improve, because the average age of your various accounts, in addition to whether you’ve applied for new accounts in the past few months, are also important factors in determining your rating.
A lot of what determines your credit score is common sense, so if your review of your finances turns up any worrying factors, working to fix them will almost certainly help.
Image: kevin dooley, via Flickr