Boosting Your Credit Rating

Are you tired of having a poor or average credit rating? If so, why not take a few steps towards boosting your credit rating? By simply doing five little things, you can begin taking steps to improving or actually taking control of your credit rating. For the most part, these tasks are fairly easy to do, though some will require that you be a little more proactive, and at least one may require that you make a lifestyle change. That being said, while these are tasks that you should complete, they are also guidelines. Simply following one or two will help to improve your credit rating, while following all of them can increase it dramatically.

• Where do you stand? Before you can begin boosting your credit rating you need to know where exactly you stand. The easiest way to do this is to contact the three main credit-reporting agencies, and ask for your credit report. You are allowed by law to receive a free copy of this each year, and will allow you to know where you stand with each of the reporting agencies.
• Lower your debt ratio. While you are waiting for your reports to arrive, you can take the opportunity to lower your debt ratio. This basically means that if you can, focus on paying off any outstanding credit that you currently have, and getting out of debt as much as possible. Ideally you want to have your balance below 30% of the limit on each card that you have. If at all possible limit yourself to no more than two credit cards.
• Dispute mistakes. When you do receive your credit reports take a good long look at them. Make a note of any problems, disagreements, or mistakes that you may find. Dispute each and everyone that you come across. It may not seem like much, but if you have an old account that you paid off, but your report says is in collections, it could be costing you up to 100 points on your credit score.
• Avoid new credit. Every time you apply for a new credit card, or have someone run a credit check on you affects your overall credit rating. While it may be only a small effect, each of the inquiries will add up and could adversely affect your credit rating.
• Make payments. One of the best ways of boosting your credit rating is also potentially one of the most difficult as well. That method is to make your payments on time. If you are able to make your payments in full, each month, then you will see an amazing jump in your overall credit history. Conversely, if you can't then you need to make sure that you pay at least your minimum payments each month. Late payments always adversely affect your credit rating, and end up dragging it down.