Here are six basic things that an individual can do to help improve their credit.
Fix your Credit reports to make them 100% accurate Current statistics tell us that 7 out of 10 credit reports contain errors, so this step is critical. You can either dispute the questionable items on your credit reports yourself, or you can have a reputable firm, such as Lexington Law, do it for you. Do not expect credit bureaus to help you voluntarily. Credit bureaus are for-profit companies, and it costs money to update records. You must be proactive.
Regulate your open accounts Consider closing unused accounts, high interest accounts, annual fee accounts, etc. Try to have about 6 credit accounts open, all in healthy standing, with a lengthy history if possible.
Don't recklessly apply for new credit Multiple inquiries over a short period of time may make it seem like you're opening numerous credit accounts because something is going wrong financially, or that you have more debt than you can realistically overcome.
Pay on Time Pay all your bills on time each month. Negative items, such as late payments, collections, and bankruptcies have the greatest negative effect on your credit score. Lenders need to know that they can count on receiving timely payments from you.
Don't overextend your credit limits If your credit cards are pushing their limits, then this can be a red flag for lenders. Try to keep your credit card account balances below 35% of your available credit limit. This may keep you from looking overextended.
Time fixes everything This may not always be true with credit, but it does apply. When you establish a long history of using credit responsibly you demonstrate a certain quality of character. You might want to keep the oldest account on your credit report open in order to show an extended period of credit use.
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