How to Raise Credit Score
We try so hard to keep our credit scores in good standing knowing the benefits that a good credit score reaps that knowing how to raise credit score is invaluable. There are many advantages to keeping our credit score in good standing and in knowing how to raise credit score just like, in turn, there are many disadvantages to our credit scores not remaining in good standing. So understanding how to raise credit score effectively can carry a lot of weight within our financial lives.
How to Raise Credit Score – Understanding What Can Damage Your Credit Score
There are many ways that our credit score can be damaged and, many times, through no fault of our own. Following are 3 ways that our credit scores can be negatively affected:
- Excessive inquiries into your credit report
- Accepting an excessive amount of credit offers growing your total credit limit to an unhealthy and possibly unaffordable level
- Closing all of your lines of credit once paid off
How to Raise Credit Score – Excessive Credit Inquiries
Did you know that every time an inquiry is made on your credit report, it does decrease your credit score? Granted, not by much, but if you consider the many creditors that have free reign to go into your credit report to make inquiries in an effort to offer you pre-approved credit card offers on a daily basis, the inquiries add up, thus affecting your credit score.
When examining how to raise credit score you can request fraud alerts to be placed on your credit reports thus hindering creditors to freely make inquiries on your credit reports whenever they choose. And also, when learning how to raise credit score, don’t apply for every single credit card that you come across.
How to Raise Credit Score – Excessive Amount of Credit
Getting a lot of offers in the mail for a huge amount of credit cards at a great interest rate? Flattered? You should be. That’s great. It means your credit is acceptable enough for a creditor to want to extend credit to you. Should you feel proud? Yes. Should you smile and feel great about how well you have done in being financially responsible with your credit? Yes.
But, in learning how to raise credit score, should you mail these offers in and accept them? No. The reason? Because even though these offers are being extended to you, if you accept all of these offers, you are also accepting a huge amount of credit, maybe even more than what your income can afford and if you are not careful, you can look at it as “extra money” and overspend on your credit cards. This is key when looking for ways of how to raise credit score. This can cause you to fall deeper into debt and even enter into the dreaded world of “collections” which can be very destructive to your credit score.
How to Raise Credit Score – Keep those Lines of Credit Open
Lastly, when finished paying off your credit cards, never close them. Keep them open. It’s so very important to do so. Closing your credit cards after paying them off really does hurt your credit score, is counter intuitive to the methods for how to raise credit score and it will remain much higher keeping them open and just not spending on them after they are paid in full.
Part of your credit score is based on the percentage of available credit that you have used. Closing cards that are not being used but with healthy lines of credit greatly increases this percentage. You want to keep this percentage down so having a decent amount of unused credit lines actually benefits your credit score!
I hope these few tips will help you understand how to raise credit score and that you will stop back as we add more valuable tips tips to the site!
