How to Improve Your Credit Rating

How To Improve Your Credit Rating

Wondering how to improve your credit? Improving your credit is possible, however, how to improve your credit rating as quickly and efficiently as possible is largely dependent on your present financial circumstances. Improving your credit after foreclosure or entry of other adverse events such as bankruptcies, late payments and federally imposed tax liens, will always for example, rely solely on how well you can restructure your finances in order to pay off your debts. Credit bureaus know that people make mistakes and will see things like foreclosures followed by consistent periods of timely bill payments as a sign of you exercising better financial diligence. 

Improving Your Credit Report After Times Of Financial Hardship

One of the most effective ways to go about improving your credit after such an event as a repossession or foreclosure is to stop applying for further credit. One of the worst things people looking to improve credit can do is apply for even more credit. Each application deducts points from your overall credit score and repeated applications demonstrate to lenders and credit bureaus that you are financially overstretched and desperate for financial assistance which you likely won’t be able to service.

Waiting for at least three years after a repossession or foreclosure before applying for any kind of credit is therefore strongly recommended by credit bureaus themselves. In the meantime, if you have things like bankruptcies, wage garnishes and tax liens on your credit file, it is doubly important to make sure that you service the terms of these as expeditiously as possible. 

How To Improve Your Credit Rating If You Are Not In Debt

Alternatively of course, people often try to find ways to improve credit scores in order to better qualify for certain financial products and services, as well as more preferable interest rates, not because they have any kind of adverse credit history. In this case, improving your credit is largely dependent on paying your bills on time. However, keeping balances on things like credit cards as low as possible is also a good idea.

In fact, a key point to keep in mind when looking at how to improve your credit rating, is that high levels of revolving debt such as credit card debt can adversely affect your credit score, even if you consistently pay your credit card balance on time.

Improve Your Credit By Keeping Things Simple

On the same note, if you are looking to improve your credit rating, it is best to refrain from moving debt around, as well as opening accounts which you don’t need. New financial products and services often require hard inquiries to be made by lenders on your credit file, each one of which can adversely affect your credit rating and each one of which will stay on your credit report for two years.


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