More Tips for Improving Your Credit Score

If you are suffering from bad credit, there are several steps you can take in order to help improve your credit score and to increase your chances of obtaining a loan with a lower interest rate. 

One way to help improve your credit rating is to get a credit card.  Yes, you will likely have to settle for a card with a very high interest rate.  But, if you make sure to pay the balance in full at the end of each billing cycle, the interest rate won’t affect you.  In addition, by using the credit card on a regular basis and paying it off each month, you can provide a significant boost to your credit rating.

Before applying for that credit card, however, you need to make sure the credit card company reports your activity to the major credit reporting bureaus.  Believe it or not, not all credit cards do report to these agencies.  This is particularly true of pre-paid credit cards.  Obviously, if the credit card company does not report your activity to the reporting agencies, it isn’t going to do a bit of good when it comes to improving your credit rating.

If the card only reports to one agency, that is good enough.  Ideally, it should report to all three.  But, if it reports to just one, you can request that the one agency shares your information with the other two.  In this way, you will know you are covered with all three agencies.  Remaining up-to-date on all three credit reports is important because a potential lender may only look at the report provided by one agency when deciding whether or not to approve your loan.  If the one credit reporting agency the lender selects is the one the credit card company does not report to, you will not receive the benefits of an improved score.

When selecting the credit card, you also need to consider any fees that are associated with it.  Some credit cards have a number of fees, including annual fees and transaction fees.  Select the credit card with as few fees as possible.  If you have particularly bad credit, you might have to accept a credit card with a few fees.  This is a necessary sacrifice you will have to make in order to improve your credit rating.  But, as soon as your credit rating is sufficiently improved, go ahead and apply for a new card that does not charge such high fees. 

You might even consider contacting your current credit card company to see if the can change your credit card agreement to one that is more pleasing to you.  Many companies will be willing to do this rather than take the risk of losing you as a customer.

Related Posts:

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This entry was posted on Saturday, March 17th, 2007 at 6:52 pm and is filed under Tips & Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.