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Smart Moves That Will Increase Your Credit Score

By: Julian Hooks

Increasing your credit score is going to depend a lot on where it is now and how it got there. For many changing a credit score is because they are new to the credit world or they have already had problems with there credit and finances. So each will be different and require different approaches.

When you are new to the credit world you start with a lower score and it is hard to get credit. But you can find ways to build your credit score if you are responsible with money and time management.

1. If you have no credit history you can create one with a secured credit card. A secured credit card is a card you get through a local bank or credit union by placing a certain amount in the credit card savings. You can charge up to but not over the amount. Make your payment on time every month. This is extremely important. Do not be late on a payment even once!

Keep the charge purchases reasonable, but not to the maximum amount. Do not pay off the entire bill each month. This is a great way to save on finance charges, but it will not build a good credit payment history. You will need to leave a small balance each month for 6 months to 1 year. Once you have completed your probation time your account will be reviewed for a non secured credit card.

2. Take a loan against your savings account through your bank. You repay the loan amount each month until it is paid in full. During this time you cannot touch your savings account. Once the loan is repaid your savings account will be available to you as normal and you will have a credit record, increasing your score.

3. If you hold a good job and can afford the monthly payment of a credit card you can apply for a store card. The interest rate will be higher, but as long as you maintain your payments each month on time it will increase your credit score. Once your credit score begins to climb you will have the option of applying for more credit. But be careful you don't obtain so much credit it hurts your score. You can not have more credit payments than your income can afford or you can pay off in an emergency.

For the person that is fighting a financial disaster there are several ways to save your credit score and raise it from the depths of destruction. But you have to be ready to invest time, effort and every bit of money you can. You will need to sacrifice in order to raise you score or repair your score.

1. Pay off all small balances on your credit report. If you have more than ten credit cards pay off the smallest and close the account. No one needs more than four credit cards. If the small balance cards are the ones you choose to keep then do not re charge anything on them as you pay off the others. Once you have a larger balance paid off you can close that account.

2. Once you have the credit cards under control charge only half of your limit and no more. Your credit score will increase if you do not charge too high, but pay off a card every 4 to 6 months and start over.

3. Pay off property loans before taking out a new one. If you have a large property loan consider refinancing for a lower interest rate. Do this only once. This will look like a smart credit move to scoring companies and free up available credit for future purchases. Do not over extend your credit.

Keep your credit spending under control and do not charge more than you make. Update your credit information on major career moves so your will be provided with more spending options. Do not panic and spend on your credit cards. Pay offs and new loans help to increase your score if they stay within reason.

About the Author

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