Improving Credit - Tips & Advice to Improve your Credit Score

By David Zwierecki

Building and Rebuilding your credit does not have to be nearly as hard as it sounds. In order to maximize your credit scores and build or improve your current credit you need to first understand how the credit scoring system works.

Here are some quick tips on improving your credit score that you can do all on your own:

This is the most obvious of all of the tips but you need to start with making all of your payments on time. Make sure you pay your co-pays for insurance bills at the doctors office and/or hospital so that they do not eventually find themselves in the collections department and reporting as a blemish on your credit report. This is one of the most common types of collections that report to consumers credit reports.

Never borrow over 50% of the maximum credit limit on your credit cards. It is even better if you can keep the balances under 30% of your maximum credit limits. Maxing out your credit cards, or even worse, going over your credit limit can have almost as negative affect on your credit report as late payments.

Maintain a good balance of credit. For example 1 auto loan, 2 credit cards and 1 mortgage loan would be a good balance of credit. If you were to have 10 credit cards only and no other credit, this would not be a good balance/mixture of credit usage.

Limit the number of total inquiries you have against you. This simply means do not apply for every type of credit that you can. Do not sign up for new credit cards at every sporting event or mall kiosk that you see so that you can get the free gift. Too many inquiries can have a negative impact on your credit score.

Try piggybacking credit off of a friend or family member. This is a method of having a friend or family member add you one (or more) of their credit cards as an "AUTHORIZED USER," not as a co-borrower and you can instantly gain their credit history from that credit card. Not all credit card companies will report this to your credit but many of them will. You must make sure the individual has a good payment history and is not over-extended on that credit card themselves for you to receive maximum benefits from this. Also a credit card with a long history will be much better for you to be added to.

If you are new to credit the easiest credit cards to obtain are usually department store credit cards, such as JCPenny, Sears, Kohl's, etc... Also, Capital One and Household Bank are very easy to obtain credit cards through as well.

Therefore, just because you have credit cards does not mean you need to use them. Use them very sparingly and preferably only once in awhile to demonstrate a responsible payment history. Follow the tips above and the tips on the link above in order to improve or build your credit.

The author of this article, Dave Zwierecki, has over 10 years of experience in the credit and mortgage lending fields. http://www.gofirstsecurity.com

Here is a great link on credit building/rebuilding and how credit scoring works: http://fshomeloan.com/index_files/mortgageblogger.htm

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