Tips to Achieving an Above Average Credit Score

Posted by interfuse on September 10th, 2010

Having a good credit score is very important, it can lead to better interest rates, flexible loans, higher rewards and higher credit limits. If your credit score is average, a few necessary changes to your credit report and your normal spending habits could bump you from average credit to well above average (excellent) credit.

• Pay your credit cards off each month, it is very important not to carry a balance!
• Never charge over 35% of your available balance to a single credit card in a single billing cycle.
• Check your credit report for inaccuracies and delinquencies. Dispute any late payments and if your dispute is denied, be persistent, make a second dispute! These negative marks can drop you 100 points or more.
• Pay off any outstanding debts, if you are having trouble keeping up with interest payments, try to obtain a 0% 12 month balance transfer. This may give you a strike on your credit inquiries, however in the long run will pay off by allowing you to get your financial house back in order.
• Do not apply for loans or credit cards excessively. Inquiries on your credit score are like strikes. As a general rule of thumb, three strikes per 12 months, and you?re out!
• Never, never, never make late payments!
• If you charge your monthly purchases to a credit card for rewards, you can bump your credit score by quickly paying off those purchases before the end of the billing cycle. You should know the date your cycle ends, if your statement is issued on the 16th of the month, submit a payment for most or all of the balance on the 15th.
• Use a credit monitoring service like TrueCredit, these are indispensable. They will help to keep your identity safe and save you money in the long run by offering you useful tips for maintaining an excellent credit score.
• For your own security, be sure your address on file with TransUnion, Experian and Equifax is up to date and accurate. If not, submit updates directly to the crediting bureaus.
• Securing a line of credit for a car or a home can help to establish a trusting relationship between you and creditors. Though your score may drop after securing the credit, it will increase as you pay off your debt and make your payments on time.
• Maintain your positive changes and establish yourself as financially responsible person. Over-time (anywhere from 1-5 years depending on your financial situation) maintain a positive relationship with the bureaus will pay off and continuously increase your score.
• Don?t get frustrated, if your score drops a few points during a billing cycle, make a couple of changes to your habits and wait for the next update to your credit score (you can get these monthly with TrueCredit, most other agencies offer updates quarterly).

Using these tips wisely can quickly increase your score from an average score to an excellent score. Don?t be too surprised (but be excited) when you make some positive changes (disputing late payments and maintaining positive spending habits) and you see your score jump 100 points or more in a single billing cycle! Depending on your situation you may be able to quickly establish a good credit in 6-12 months and excellent credit in 1-2 years.

If you?re in the market to purchase a new car, a new home or looking for a credit card that offers the best rewards, you must understand first that having a good or excellent credit score can put hundreds (even thousands) of dollars back in your bank account each month. Not only will you earn yourself lower interest rates, you will receive lower closing costs on consumer (home) loans, and bigger rewards from credit cards (these can really add up).

Best of luck and make your payments early if you can!