What Can I Do To Improve My Credit Rating?

by : Darrell Knox

It may surprise you but it's true that most people spend more money than they earn. Think about that for a moment, does that sound possible? Well it is if you purchase items using credit!

Using credit is nothing to be ashamed of and can be a great way to purchase things and then pay the amount back over a set period of time. However as many people have found out, things can go horribly wrong if you don't keep up with payments. One of the ways to make managing your credit bill easier is to improve your credit rating. What this will do is first improve your chances of successfully applying for credit and it can also reduce the overall money you will be paying.

So how can you improve your credit rating? These are the main ways to improve your credit rating.

Pay on Time
Yes, it may be basic but you'd be surprised how many people don't make their credit payments on time. If you're late in paying your fees, you will be charged an additional fee, not to mention you will be damaging your credit rating. All late payments will be recorded and a history of your credit situation is recorded. Payment time is quite a significant element to your overall credit score and can account up to 30%. If you do find yourself being late on several payments, best thing to do is catch up and stay on track. Your recent payment history is more important than your past history, so you can turn things around.

History Matters
Unfortunately your history isn't completely a thing of the past when it comes to credit. However having a history of credit card or a loan will work in your favor provided you have a positive history. If you do have some sort of history it will work in your favor as it proves that you are able to make timely payments and have experience with credit.

Credit Cards
Credit Cards can be a blessing but they can also ruin your life if you're not careful. It's actually better for your credit rating if you have at least one credit card as it shows you have experience with managing credit. However don't have too many credit cards as it gives the impression that you don't have the money to purchase items outright. If you have too many maxed out credit cards you will probably find yourself being refused any more credit. It's really important you pay off your credit card(s) as quickly as you can.

The key to improving your credit rating and having a pleasant experience with credit is to pay your credit payments as fast as you can. That doesn't mean paying one credit card off with another credit card! There's no huge mystery behind it, simply don't spend what you cannot afford to pay back. A little credit bill may not put you in a dire financial situation, but remember, everything in moderation even credit!