Credit Education

Credit means everything in today's world. It affects a person's ability to buy a car, a home, insurance rates, and even employment. With so much emphasis placed on good credit, it is imperative a person knows how to raise their credit score. With a good credit score, which is typically defined as a score above at least 650, moderate interest rates on credit cards and loans are offered. This can save a great deal of money in the long run. These 5 tips will help increase a credit score and afford a person the luxury of more credit with better rates.

• Pay every bill on time even if the payment sent is the minimum amount due. One late payment can dramatically reduce a credit score. It doesn't matter if it's only a day late. Late is late and it will negatively impact the overall score. If a payment must absolutely be late, contact the creditor and ask for an extension. Most companies will offer to do this once a year.

• Avoid having a bill sent to collections. Even if the bill is paid off, the collection report will stay on your report for seven years. Work with a creditor to arrange monthly payments before a bill is sent to collections. Most creditors will accept monthly payments as long as those payments are made on time every month.

• Avoid paying off all credit card balances completely. If you want to know how to raise your credit score , it is best to have a balance on credit accounts that monthly payments are made to. This proves the ability to maintain regular payments and will help increase a credit score.

• It is crucial a person pays close attention to his or her credit report. Any unauthorized charges should be disputed immediately. This can be an indicator of identity theft. As soon as a suspicious account appears on a credit report, it should be investigated immediately.

• Avoid closing accounts that are not currently in use. Scores depend heavily on credit history. Pull out an old credit card and use it for minor purchases from time to time to keep it active. The older a credit history, the better it is for a credit score.