If you thought you were through with report cards once you were out of school, think again. Every time you apply for credit, the lender will look up your “grade” that tells them how likely you are to repay what you owe. That grade is your credit score. Higher scores mean you will qualify for more loans and be offered better interest rates. These five steps will help you improve your credit score:
- Review your credit report regularly and contact the credit bureau to correct mistakes.
- Pay your bills on time.
- Reduce your credit card balances.
- Pay off debt rather than moving it around.
- Don’t close unused credit card accounts near loan time. Doing so raises your balance-to-limit ratio.
- Avoid bankruptcy; instead, try credit counseling.